EDS Denies Layoff Report, Shareholders Approve HP Deal - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
IT Leadership // IT Strategy

EDS Denies Layoff Report, Shareholders Approve HP Deal

The transaction, which valued EDS at $25 per share, is expected to close in the second half of 2008.

A spokesman for IT services provider EDS called a report that the company is planning to lay off up to 20% of its staff in the Americas as it prepares to complete its merger with Hewlett-Packard "completely factually incorrect."

One technology news site on Thursday reported that word of the cuts was spreading internally among managers at the Dallas-based company. The spokesman dismissed the report as "rumor" and said it was false.

Meanwhile, HP's proposed acquisition of the company has cleared two significant milestones.

Earlier this week, EDS said that Europe's antitrust watchdog agency, which has closely scrutinized U.S. tech firms in recent years, has given the deal its OK. On Thursday, EDS said a majority of its shareholders voted in favor of the acquisition.

HP agreed to acquire EDS in May for $13.9 billion. The transaction, which valued EDS at $25 per share, is expected to close in the second half of 2008.

HP has said it plans to create a new business unit that will house EDS's operations and be led by current EDS CEO Ron Rittenmeyer, who will report directly to HP CEO Mark Hurd. The new unit will go to market under the name "EDS -- an HP company."

In one stroke, the merger -- if it goes through as planned -- would create the world's second-largest IT and business services company, next to IBM. The combined services revenue for EDS and HP last year was $38 billion, compared with $54 billion for Big Blue.

HP's EDS unit would house 210,000 employees.

HP has struggled to grow its services business internally. Despite publicly stating its intention to become a leader in the outsourcing market and investing accordingly, the company often found itself in the position of also-ran against competitors like IBM, Accenture, and EDS itself when big deals were handed out.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Commentary
CIOs Face Decisions on Remote Work for Post-Pandemic Future
Joao-Pierre S. Ruth, Senior Writer,  2/19/2021
Slideshows
11 Ways DevOps Is Evolving
Lisa Morgan, Freelance Writer,  2/18/2021
News
CRM Trends 2021: How the Pandemic Altered Customer Behavior Forever
Jessica Davis, Senior Editor, Enterprise Apps,  2/18/2021
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you.
Slideshows
Flash Poll