Major reorganization comes to SAIC as Beyster prepares to depart

The new boss is wasting no time.

Ken Dahlberg, who became chief executive officer of Science Applications International Corp. Nov. 3, is moving quickly to reorganize and realign the company's famously decentralized structure.

According to SAIC spokesman Ben Haddad, the reorganization is slated to go into effect by Feb. 1.

At the same time, company founder Robert Beyster, who gave up his position as CEO to Dahlberg while remaining chairman of the board, announced Jan. 2 that he is negotiating with the board of directors to relinquish the chairman's seat prior to July, when his term ends.

Beyster's decision came as something of a surprise, especially since he issued a personal press release announcing the discussions.

"Ken works closely with him," Haddad said. "We value his insights [and] we would like him to stay until July."

Beyster's office referred phone calls to Haddad, who said he could shed no further light on the chairman's plans.

The reorganization of the company is intended to simplify the management structure and make it easier to support large customers, Haddad said. Out of a workforce of about 43,000 people, perhaps 200 to 300 will be affected by the restructuring, he said. Some will be reassigned to other jobs, while others will be laid off. SAIC will help those losing their jobs to find new ones, Haddad said.

"There will not be large scale layoffs. This is not about doing any major housecleaning," Haddad said. A common complaint about the existing organization is that multiple managers from SAIC would have business dealings with one major customer. "We're trying to get away from that and assign a major customer to one manager."

Under the old structure, SAIC had five "clubs" that included 13 sectors and 49 groups, plus Telcordia Technologies Inc., the company's telecommunications software and services subsidiary. In the revised organization, there will be three large segments ? federal, commercial and Telcordia. Within federal there will be five groups encompassing 25 business units. Commercial will consist of two business units, and Telcordia will have six groups, Haddad said.

The cost of the reorganization is expected to be more than offset by savings in some infrastructure functions such as accounting and human resources, he said.

The reorganization also is intended to meet Dahlberg's growth goals for SAIC.

"Ken would like us to become twice as large in the next three to five years," Haddad said. "We're about a $6 billion company right now, and he would like us to be $12 billion to $15 billion."

Headquartered in San Diego, SAIC was ranked no. 3 on the Washington Technology 2003 Top 100 federal government contractors.

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