Electronic Data Systems (EDS) will offer voluntary early
retirement options to about 9,200, or 17%, of its US employees, as
part of its ongoing efforts to reduce costs.
EDS expects about half of the eligible employees to accept the
early retirement offer, which would cut its US workforce of about
53,000 by about 9%.
EDS expects that less than half of the vacated positions will
have to be filled again, which will generate net savings of about
$150m (£82m) in 2005 and net annual savings of about $250m starting
in 2006.
EDS chairman and chief executive officer Michael Jordan said
last month the company plans to eliminate between 15,000 and 20,000
jobs over the next two years as part of an effort to cut $3bn in
costs. The EDS spokeswoman said the early retirement offer is part
of this plan.
EDS, the world's second largest IT services company after IBM,
has been struggling for over two years with a variety of problems,
including disappointing sales, problematic client contracts and an
ongoing investigation from the US Securities and Exchange
Commission launched in 2002. Jordan was hired in March 2003 to
address these problems.
EDS expects to take a pretax charge of about $150m in this
year's fourth quarter as a result of the early retirement
programme.
Retirement dates will be staggered through four quarterly stages
ending on 30 September 2005. EDS extended the offer to most US
employees who by year-end 2004 will be at least 50 years old and
fully vested in the company's retirement plan.
EDS has not decided whether to offer early retirement to
employees outside of the US yet, the spokeswoman said. EDS now has
a total of about 119,000 employees worldwide.
Juan Carlos Perez writes for IDG News Service