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EDITIONS
Thursday, 31 October, 2002, 07:55 GMT
More woes for computer firm EDS
Men discussing work over a computer screen
EDS is suffering from the slowdown in computer spending
The embattled computer services group EDS has warned of ongoing woes as it posted a 59% slump in profit for the last three months.

The group has also confirmed it will cut up to 4% of its workforce, or about 5,500 jobs.

EDS, the world's second largest computer services company, blamed a sharp fall in spending for the fall in profits.


There is no sugarcoating these results

Richard Brown, EDS chairman

However, investors appeared prepared for the bad news, with shares rising 15% in after hours trading.

Spending cuts

EDS said its new contracts fell to more than half the level of the previous year in the three months to September, as companies scaled back their expenses.

The company reported earnings of $86m for the period, down from $212m a year ago.

However, the market had been warned of the dramatic fall last month, when the company scaled back its forecasts.

"There is no sugarcoating these results," said chairman and chief executive Richard Brown.

"They are the by-product of a very difficult market and our own decisions."

Job loss

Mr Brown said the company, the number two computer services company after leader IBM, would continue to be cautious on its outgoings.

Earlier this month, EDS warned that it would be forced cut its workforce and has now confirmed that this would mean a 3-4% reduction "over the next several quarter".

A spokesman for the company said this would equate to 5,520 jobs in total.

EDS also said it will transfer 1,500 US jobs to India, Brazil, Ireland and the Czech Republic as part of its cost-cutting measures.

See also:

28 Aug 02 | Business
26 Jul 02 | Technology
31 Oct 02 | Business
28 Oct 02 | Business
17 Oct 02 | Business
15 Oct 02 | Business
15 Oct 02 | Business
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