EDS Offers 11% of Work Force Early Retirement

The outsourcing giant has been cutting jobs in the U.S. while hiring workers in lower-cost countries.

At an estimated cost of between $70 million to $130 million, outsourcing giant EDS said in a Sept. 12 Securities and Exchange Commission filing that it will offer early retirement packages to about 12,000 U.S. employees in the fourth quarter, or more than 11 percent of its 136,000 worldwide work force.

After receiving board authorization Sept. 6, the company announced the offer to its staff on Sept. 11. Employees have until Oct. 30 to accept or reject the offer.

Workers who opt for the early retirement will receive an additional $10,000 from the retirement plan, as well as extra credits to their retirement account, according to the filing.

This benefit is equal to five times the allotted annual funds made to their company retirement plan.


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Officials were unable to nail down the exact price it would run them until they knew how many employees would accept the offer.

Second in revenue to only IBM among United States technology services companies, EDS, based in Plano, Texas, has cut costs over the last several years. The cuts have included the elimination of 5,000 jobs in 2003 and 20,000 in 2004.

Its current CEO, Ronald Rittenmeyer, took over on Sept. 1 and is said to be hiring workers in India to revive profit by replacing more-expensive U.S. employees. Rittenmeyer said he would be bringing its work force in low-cost countries, including India, Brazil and the Czech Republic, from 38,000 to 45,000 by the end of 2008.

EDS also offered 9,200 workers early retirement in 2004, an offer accepted by 1,500.


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