Perot Systems cuts 200 jobs in restructuring
The computer services company says it will eliminate 2.5 percent of its work force as part of restructuring efforts to streamline its business.
The job cuts, which amount to about 2.5 percent of its work force, will help the company eliminate redundant administrative positions, the company said. The Dallas-based company said it expects to take charges totaling approximately $48 million as a result of the reduction and restructuring plan.
For the fourth quarter, the company intends to report about $37 million of those charges, or 20 cents per share, and record the remaining $11 million in charges, or 6 cents per share, in its first quarter of 2001.
Perot Systems stock was down 19 cents, or 1.92 percent, to $9.56 in early trading.
As part of the new plan, Perot Systems, founded by Ross Perot, the billionaire and former U.S. presidential candidate, intends to consolidate certain industry groups where the company has a smaller presence into a single division. The company plans to concentrate on serving clients in industries such as financial services, health care and manufacturing, which represent approximately two-thirds of its revenue.
The company also said it will expand certain business practices in specific areas including business consulting, software engineering and technology integration.
Perot Systems, which is considered a traditional, old-line systems integrator and consulting company, competes with several services giants, including Computer Sciences, IBM Global Services and Electronic Data Systems, a company which Perot also founded.
Job cuts and restructuring efforts have taken place at several consulting companies recently, with the smaller and newer companies that made their focus the Internet among the hardest hit.
On Monday, Perot Systems rival Cambridge Technology Partners, also considered an old-line services company, laid off 280 employees and warned of lower fourth-quarter expectations due to the slowdown in the Internet-related consulting market. The move underscores that the dot-com slump and overall rocky market conditions are affecting both newer Net consultancies and old-line agencies.
Excluding the charges related to the work force reduction and restructuring plan, Perot Systems said it expects to report fourth-quarter profits between 12 cents and 13 cents per share.
Analysts polled by First Call anticipate the company to earn 12 cents per share.