CSC launches major restructuring, explores company sale
- By Roseanne Gerin
- Apr 04, 2006
Computer Sciences Corp. expects to cut upwards of 5,000 jobs as part of a strategic plan to boost shareholder value, and may even wind up selling the global information technology and systems integration company.
The El Segundo, Calif., company plans to cut almost 6.3 percent of its 80,000-strong workforce, with reductions of about 4,300 during its fiscal 2007, which began April 1, and about 700 in fiscal 2008, CSC said today. CSC expects the jobs cuts?the majority of which will occur in Europe0?will improve its future cash flow and earnings. The company has 80 locations across six continents.
CSC has retained Goldman, Sachs & Co. as its financial advisor as it explores the possibility of selling the company.
Rumors have been swirling through the federal technology community for some time that CSC would go up for sale. As a major government and defense contractor, federal agencies account for one-third of CSC's revenue. At one time, Lockheed Martin Corp. was looking at CSC's government business. Hewlett-Packard Co. was another interested buyer of the company.
CSC's federal unit in Falls Church, Va., provides IT solutions and services to virtually every agency and department of the U.S. federal government. The sector employs about 24,000 people in more than 750 locations worldwide and has annual revenue of about $5 billion. Its main offerings are enterprise modernization, telecommunications and networking, managed services, base and range operations, and training and simulation.
CSC expects the restructuring to have related pre-tax related charges of about $345 million this fiscal year and about $30 million in fiscal 2008. Excluding these charges, CSC said the job cuts will save about $150 million this fiscal year and about $300 million in fiscal 2008.
The company does not plan to disclose further details about its efforts until its board of directors has approved a transaction.
CSC, which had annual revenue of $14.1 billion in fiscal 2005, ranks No. 4
on Washington Technology's 2005 Top 100
list of federal prime contractors.