Information technology giant Computer Sciences Corp. has announced that it plans to slash its payroll by 4,300 persons and is examining the possibility of selling the company.
The company said its board decided to explore a potential sale of the company among strategic alternatives to enhance shareholder value in response to recent expressions of interest by unidentified parties.
According to El Segundo, Calif.-based CSC, the company has retained Goldman, Sachs & Co. as its financial advisor in this process.
The company cautioned that "there can be no assurance the exploration of strategic alternatives will result in a transaction, and the company does not intend to disclose developments regarding its exploration unless and until the board of directors has approved a specific transaction."
Meanwhile, CSC also announced it is implementing a restructuring program involving workforce reductions, which is aimed at improving future cash flow and earnings.
According to CSC Chairman and CEO Van B. Honeycutt, "For some time it has been apparent to us, and to other companies in our industry, that there is excess capacity in certain geographies, particularly Europe.
"After lengthy consideration, we have decided that this is an appropriate time to deal with the issue through a restructuring. This action is designed to enhance shareholder value regardless of any strategic alternatives we may explore," he said.
The company said the restructuring program involves workforce reductions of approximately 4,300 employees during fiscal 2007, which began April 1, 2006, and approximately 700 employees in fiscal 2008.
Most of these reductions will occur in Europe, "but plans will vary by country based on local legal requirements and consultation with works councils and employee representatives, as appropriate," CSC added.
Excluding pretax restructuring charges of approximately $345 million in fiscal 2007 and $30 million in fiscal 2008, the company said it expects the restructuring plan to result in pretax savings of approximately $150 million in fiscal 2007 and $300 million in fiscal 2008.
Founded in 1959, Computer Sciences Corporation is a global information technology (IT) services company. With approximately 80,000 employees, CSC provides systems design and integration, IT and business process outsourcing, applications software development, Web and application hosting, and management consulting.
CSC reported revenue of $14.6 billion for the 12 months ended Dec. 30, 2005. For more information, visit the company's Web site at HYPERLINK "http://www.csc.com" www.csc.com.
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