IT company Unisys cutting 1,300 jobs
23 Dec 2008
Computer services company Unisys today said it would cut 1,300 jobs, or 4.3 per cent of its worldwide workforce, consolidate plants, suspend contributions to the US 401(k) pension plan and not offer raises to most employees next year.
The information-technology services company aims to reduce costs by more than $225 million a year, although the cost-cutting actions will lead to a fourth-quarter charge of $80 million to $85 million.
The company has been struggling as demand for its services waned due to tightening credit and curbed customer spending. In November, Standard and Poor's said it was taking the company off its S&P 500 index. This was quite a downfall for a company, which, when created in 1986, was the second largest of its kind with revenues of $10.5 billion and 120,000 employees.
In its latest quarter, Unisys' net loss widened to $34.7 million, of 10 cents a share, from 31 million, or 9 cents a share, a year earlier on reduced spending by clients, including the federal government. That was its third consecutive quarterly loss.
In October, Unisys named J Edward Coleman as chief executive, calling him a "recognized leader in driving corporate transformations and turnarounds." The company's stock now trades at under $1, and earlier this month it announced plans for a reverse stock split.
''The cost-reduction actions are part of an overall program, led by new Unisys chairman and CEO Ed Coleman, to simplify the company's business structure, concentrate its resources more effectively, and drive improved market success and profitability,'' an official statement said.
Layoff announcements are becoming commonplace in the technology industry. Outplacement consulting firm Challenger, Gray & Christmas said that technology industry job cuts could hit 180,000 by year's end. Already enterprise vendors such as HP and Sun Microsystems have announced steep cuts. HP is slashing up to 25,000 jobs following its acquisition of IT services vendor Electronic Data Systems. Sun plans to lay of as many as 6,000 workers.
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