Struggling IT services provider, EDS, will restructure to reduce costs and improve its bottom line, a plan that includes laying off 2% of its workforce and focusing on its core outsourcing business.
The restructuring will result in pretax charges and asset write-downs of between $425m (£253m) and $475m in 2003.
EDS has been struggling for the past year. Its stock price has shrunk, its sales have been below expectations and it is being investigated by the US Securities and Exchange Commission.
"We hope to dispel a lot of the uncertainty that has been swirling around the company," said chairman and chief executive officer Michael Jordan.
EDS will refocus on its core outsourcing business, which generates about 80% of its revenue, Jordan said. The company must present one face to its customers, whereas now it has a fragmented and scattered approach to the market, he said.
"We have to have clear priorities and convergence throughout the organisation which we don't have today. This will be a multiyear task to restore our company to a leadership position," he said.
Jordan took over from former chairman and chief executive officer Dick Brown in March. Brown had been in charge since January 1999.
Juan Carlos Perez writes for IDG News Service