Outsourcing services supplier Unisys has announced plans to cut 1,400 jobs, primarily in general and administrative...
areas, and consolidate its office space worldwide. The cuts represent 3.8% of the company's 37,000 staff.
It expects to save about $70m (£39.2m) a year as a result of the move. However, the changes will result in a one-time, after-tax charge of about $63m in the third quarter of 2004, Unisys said.
At the same time, it also announced that it has netted a refund of about $30m in settlement of US tax audit issues dating from the mid-1980s. The settlement means the company can adjust its reserves for tax liabilities, allowing it to record an after-tax benefit of around $70m in the third quarter, it said.
Unisys still expects to meet its previous guidance for the third quarter.
In July, it predicted third quarter revenue will remain stable compared to last year's total of $1.45bn, albeit with a slight decline in revenue from its technology business sector, which accounts for about one-sixth of total revenue.
Excluding the impact of pension accounting and the charges announced this week, Unisys expects to report earnings per share for the third quarter of between eight and 12 cents.
In the third quarter of 2003, it reported earnings per share of 17 cents.
Peter Sayer writes for IDG News Service