EDS Australia awaits local details of job cuts

IT services provider Electronic Data Systems (EDS) is unable to rule out job cuts on the local front following the announcement this week of a global restructure to reduce costs and improve its bottom line.

The restructure plan includes laying off 2 per cent of its global workforce. EDS Australia spokesman Brian Finn said it will be some months before details of local job cuts could be confirmed.

"I wouldn't rule [redundancies] out though," he said, adding that most of the 2700 jobs to be shed are likely to largely hit US and European operations.

EDS has around 9000 employees in Australia and New Zealand; some 6700 of them are based in Australia.

Finn said the Australian and New Zealand operations remained strong in a tough climate with the number of jobs in EDS' offshore application development business increasing the trans-Tasman workforce by 100 in the past 12 months.

The company was also in the process of increasing headcount in roles such as contact centre solution development, according to Finn.

EDS, the world's second largest IT services provider behind IBM's Global Services unit, has been struggling on several fronts for more than a year with its stock price shrinking and sales below expectations.

Announcing the restructure EDS CEO Michael Jordan said the company will refocus on its outsourcing business which generates 80 per cent of revenue.

"We hope to dispel a lot of the uncertainty that has been swirling around the company," he said.

The retooling will not be completed overnight, he cautioned. "This will be a multiyear task to restore our company to a leadership position," he said.

However, Gartner analyst Lorrie Scardino said that CEO Jordan had been short on strategic details on how it plans to reinvigorate core services.

"The company wants to appear as a world-class provider, but reacts continually to market forces rather than leading; the company cites vertical expertise as a differentiator, yet its vertical expertise remains buried in organisational hierarchy and is not easily accessible or leveraged across customer accounts."

(Juan Carlos Perez contributed to this article.)

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