Computer Sciences Corporation (CSC) could be sold, and
the outsourcing firm has announced 5,000 redundancies – mainly in
Europe.
CSC says it has received several buy-out offers and investment
bank Goldman Sachs has been retained to manage any sale. CSC has
said there is no guarantee that a sale will result from any
discussions, but the jobs will still go.
The Wall Street Journal estimates that any deal could be worth
$10.6bn (£6.2bn). CSC had sales of $14.6bn in 2005. During the
current year, CSC plans to axe 4,300 staff from its total headcount
of 80,000. Another 700 will go next year, said the firm.
The job cuts will be mainly within CSC’s European business
units, which employ a total of around 24,000 staff. CSC said there
was excess capacity in these units. The company is currently
negotiating with unions and staff councils.
The cuts will lead to CSC taking a $345m charge for this fiscal
year, and another $30m hit next year. CSC said the cuts will,
however, deliver $150m in pre-tax savings this year, and another
$300m the following year.
The firm has a number of large outsourcing deals with companies
and government agencies. It does work for UK insurer Aviva and
Italian banking group Banca Intesa. CSC also announced a contract
with the US Army earlier this month.
There has been past speculation that CSC is up for sale, with
reports that Lockheed Martin came close to buying the firm last
year. Customers of CSC are being advised by analysts to check their
contracts to help manage the effects of any takeover.