EDS offers retirement to 12,000 workers
NEW YORK (Reuters) - Technology services company Electronic Data Systems Corp EDS.N, on Wednesday said it offered early retirement to about 12,000 U.S. employees, nearly a quarter of the U.S. work force, and expected a charge of $70 million to $130 million in the fourth quarter.
EDS, which ranks second by revenue after International Business Machines Corp (IBM.N) among U.S.-based technology-services companies, has been boosting profit by cutting costs, including 5,000 jobs last year, and generating revenue from contracts including a $3.9 billion deal from the U.S. Navy last year.
"It's an initiative as part of EDS's ongoing plan to improve our cost structure and competitiveness," a spokesman said of the new plan.
Earlier this month, Ronald Rittenmeyer assumed the role of chief executive, succeeding Michael Jordan, who during his four-year tenure helped EDS overcome weak technology demand and market share losses to IBM.
EDS, which has about 136,000 employees worldwide and 50,000 in the United States, said the size of the final charge might be greater or lesser than its estimate, depending on the number of employees who accept the offer.
The company said it announced the offer to its staff on September 11 after the board authorized it on September 7. It gave employees until October 30 to accept the offer, according to a filing with the U.S. Securities and Exchange Commission.
EDS plans to offer eligible employees an "enhanced" benefit equal to five times the allotted annual funds made to their company retirement plan, excluding interest credits. If applicable, EDS will also offer a benefit to the employees' Benefit Restoration Plan on their behalf, plus $10,000 from the EDS Retirement Plan.
Jordan continues to serve as chairman and executive officer of the Plano, Texas, company.
Shares of EDS slipped 2.3 percent to $21.86 on the New York Stock Exchange. The stock is off about 22 percent since Rittenmeyer was named CEO in July.
(Reporting by Franklin Paul and Sinead Carew in New York and Peter Henderson in Los Angeles)
