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EDS Ready to Trim Payroll Over 2 Years

By David Koenig
Associated Press
Friday, September 10, 2004; Page E05

DALLAS, Sept. 9 -- Electronic Data Systems Corp. could cut 15,000 to 20,000 jobs -- more than 10 percent of its workforce -- over about two years to help reduce costs by about $3 billion, chief executive Michael H. Jordan said Thursday.

"The next two years, there are going to be a lot of changes in EDS," Jordan said at an investor conference in New York. "But that will, as I said, take 20 percent out of our cost structure -- $3 billion out. That's the way you do it."


Electronic Data Services may cut more jobs to save $3 billion, chief executive Michael H. Jordan said. (Henny Ray Abrams -- AP)

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EDS, based in Plano, Tex., runs computer systems for other companies. It has struggled with money-losing contracts, a downturn in corporate technology spending and debt downgrades.

Jordan has said the company is trying to improve productivity to reduce the cost it charges for its services, making its offers more competitive with rivals such as IBM Corp.

The company has made most of the 5,200 job cuts it announced last year, and has about 120,000 employees remaining, including 55,000 in the United States.

EDS has about 5,500 employees in the Washington area, a spokesman said, many of them reporting to its U.S. Government Solutions division based in Herndon.

Jordan commented about job cuts only briefly in response to a question. He gave few details. Jeff Baum, a spokesman for EDS, called Jordan's figures an estimate.

"There isn't a hard and fast plan," Baum said in an interview. "That's an estimate, and it ultimately depends on how well we transform the business. It could end up being less than that. We might add people in other places as we bring new business on."

Baum said it was impossible to tell where cuts might be made. He said, however, that the company was likely to grow faster outside the United States than at home.

EDS has recently lost about 7,000 employees with the sale of a software division and the loss of a contract to run computer systems for Britain's Inland Revenue agency.

Baum said the layoffs Jordan mentioned are unrelated to the loss of contracts.

"We need to take $3 billion out of our cost structure. We're a people company, and there is certainly a people component to that," he said.

Staff writer Larry Liebert contributed to this report.


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