CSC to Slash 5,000 Jobs; Considers Sale

On Tuesday, Computer Sciences Corp. (CSC) announced plans to slash 5,000 positions, or approximately 6 percent of its 80,000-person staff, over the next two years and it is holding talks regarding the sale of the company, the Associated Press reports via the Plainview Daily Herald.

CSC, an information technology services provider, said it had decided to examine its options for bumping up its shareholder value, and it hired investment bank Goldman Sachs & Co. for guidance, according to the AP.

The news first came after The Wall Street Journal reported that CSC was considering a sale for a minimum of $10.6 billion, according to the AP.

In pre-market trading, CSC shares rose 6.5 percent, or $3.71, to $61, the AP reports.

CSC said the restructuring is part of a major effort to boost the company’s cash flow and revenue, according to the AP.

Under the plan, some 4,300 staff positions would be cut in fiscal 2007, and another 700 would be slashed the following fiscal year, the majority of which will take place in Europe, the AP reports.

CSC Chief Executive Officer Van Honeycutt said, “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 restructuring,” according to the AP.

The company plans to take related charges of $345 million in fiscal 2007, and $30 million in fiscal 2008, the AP reports. Not counting those expenses, CSC predicts a savings of roughly $150 million in fiscal 2007, and $300 million in the following fiscal year, the AP reports.

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