Australia safe from Unisys layoff

Plans by hardware and services vendor Unisys to cut 3000 jobs worldwide will have "little or no impact" in Australia, a local company spokesman said today.

The spokesman could not give a definitive response to job cuts in Australia, but said the focus of cost cutting measures will be in the US and Europe.

"We have actually increased our head count in Australia due to some recent outsourcing contract wins; it isn't likely to impact here to any significant degree," the spokesman said.

The company announced yesterday its net income has fallen by 53 per cent in the third quarater with net income totalling $US20.9 million compared to $44.2 million a year ago.

Unisys chairman and CEO Lawrence Weinbach still said he was pleased with the result under extraordinarily difficult circumstances, describing the current economic climate as "fragile".

Weinbach said many potential Unisys customers had delayed planned IT purchases claiming there was a short drop in expected orders for enterprise servers and networking and systems integration projects.

He said Unisys will "take the necessary actions to weather this difficult period and position the company for stronger results when business conditions improve."

As part of that strategy, the company is cutting 3000 jobs and will take an estimated pre-tax charge of $200 million in the fourth quarter to cover the workforce reductions. The program will include an early retirement incentive for eligible US employees.

Unisys spokeswoman Maureen O'Brien said that though the third-quarter earnings warning had already been issued in July, the terrorist attacks made a tough situation even worse.

"A lot of deals get closed in the end of the quarter, so it really did have an effect," O'Brien said. "Nothing happened that entire week of September 11 anywhere. Nobody was thinking about deals."

IDC senior analyst David Tapper said that while the terrorist attacks did exacerbate the financial woes at Unisys, the problems had been on-going.

"The reality is they've all been suffering," he said of technology companies over the past 12 months. For many, blaming their problems on the terrorist attacks provides a convenient excuse for what has simply been bad management, he said.

"It's a short-term kind of elixir or buffer against the winds of the financial beasts," Tapper said.

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