EDS Offers Retirement to 12,000 U.S. Workers
Electronic Data Systems, the second-largest U.S. technology services provider, said Wednesday it offered early retirement packages to about 12,000 U.S. employees, and expected a charge of $70 million to $130 million in the fourth quarter.
EDS , which has about 136,000 employees world wide, said the size of the final charge might be greater or less than its estimate depending on the number of employees who accept the offer.
The company said it announced the offer to its staff on Sept. 11 after the board authorized it on Sept. 7. It gave employees until Oct. 30 to accept the offer, according to a filing to the 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.
EDS, which ranks second by revenue after International Business Machines Corp 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.
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.
Jordan continues to serve as chairman and executive officer of the Plano, Texas, company.
Shares of EDS slipped 1.4 percent to $22.07 on the New York Stock Exchange. The stock is off about 22 percent since Rittenmeyer was named CEO in July.