EDS Confirms Offering Exit Option, More Layoffs

1:49 PM EST Wed., July 28, 1999

EDS Corp. on Wednesday said it was offering for the first time a companywide early retirementplan that could impact up to 8,000 of its U.S. employees.

Under terms of the option, workers that are at least 50 years old and fully vested in the company's retirement plan are eligible for the unified severance plan. Details of the plan were spelled out in a letter sent this week to eligible employees.

Up to half of those who are eligible are expected to "seriously consider" taking the exit option, said an EDS spokesman. The company presently employees 74,000 people in the United States and 126,000 worldwide.

EDS also said it plans to announce more layoffs by the end of the year, based on the number of people who opt for an early retirement exit.

The company also will eliminate a number of unprofitable programs within the consulting organization, although the spokesman declined to specify which ones. Closing these programs will result in a further reduction in workforce, real estate and capital equipment, the spokesman said.

This most recent move to cut costs follows a round of job cuts in April that affected about 5,200 of the company's employees, or roughly 4 percent of the worldwide workforce.

The decision to expand the early retirement option from a series of departmental programs to a companywide basis is part of an overall cost-reduction strategy put into play earlier this year by EDS Chairman and Chief Executive Richard Brown, who wants to slash up to $1 billion from an estimated $17 billion in yearly expenses.

However, even as EDS is slashing its worker ranks, it also is looking to hire people, mostly for its E-business and services activities. The professional services firm wants to keep pace with the rate of Web activity in the business sector and stay competitive in such areas as E-commerce and customer relationship management, the spokesman said.