EDS blames 2,000 job cuts on spending slowdown

IT services giant Electronic Data Systems (EDS) is to cut 2,000 jobs that make up 1.4% of its workforce, due to a spending...

IT services giant Electronic Data Systems (EDS) is to cut 2,000 jobs that make up 1.4% of its workforce, due to a spending slowdown.

Dick Brown, the company's chairman and chief executive, said the job cuts were unrelated to the IT services provider's relationship with WorldCom. "It's related to contracts, and some of our clients have pulled back spending." The EDS layoffs will mostly affect employees in North America.

The price of EDS' stock has dropped significantly since WorldCom announced last week it had discovered billions in accounting irregularities and that it would restate its financial results for 2001 and the first quarter of 2002.

EDS' stock (EDS) closed at $46.63 on 25 June, before WorldCom made its announcement later that day. It has dropped steadily since then, closing on 1 July at $30.45 and stood at $29.30, down 3.8%, in mid-afternoon trading yesterday (2 July).

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