Monday, September 17, 2007

Reading into 'standard' layoff announce - EDS

Announcements like these are pretty blatant... laying off high-cost US workers while retaining (and continuing to hire like mad) workers overseas . I would imagine that these workers should be eligible for special re-training Federal programs for those affected when their jobs go overseas, but I would doubt they are classified this way.

When the gov't announces it's numbers of US jobs affected by offshoring of work they will NOT include these numbers (and many thousands more from other such corporate programs), and economists and high gov't officials (Sec'y of Labor and the multitude of other high gov't officials are short-termers recruited from Corporations) will claim that offshoring is not affecting US workers. Indeed they will claim that the American worker actually benefits from globalization.

Offering early retirement is usually a harbinger to actual layoffs depending upon how many accept a package, and a voluntary 'offering' sometimes means 'take it or get nothing when the layoffs come next month'.

An interesting side-note ... EDS is an American company originally founded by Ross Perot, still doing much of it it's business with gov't agencies within the US. Note that US workers are now a minority in the firm and this next round will make them a smaller minority still, 38,000 out of 124,000 total .

EDS, which has about 136,000 employees worldwide and 50,000 in the United States ...

12 September 2007
12:52 pm GMT
Reuters News
(c) 2007 Reuters Limited
(Recasts, adds details)
NEW YORK, Sept 12 (Reuters) - Technology services company Electronic Data Systems Corp , 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 among U.S.-based technology-services companies, has been boosting profit by cutting costs (a euphemism for laying off US workers) , including 5,000 jobs last year, and generating revenue from contracts including a $3.9 billion deal from the U.S. Navy (gov't and military contracts being handled by offshore workers) last year.
"It's an initiative as part of EDS's ongoing plan to improve our cost structure (cost = people) 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. (currently 37% of it's employees are US workers .. if 12,000 leave with this package they will have 31%)
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 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)

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