CSC to cut 5,000 jobs as it goes up for sale


CSC to cut 5,000 jobs as it goes up for sale

Antony Savvas

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.

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