Wed, Nov 10, 1999
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EDS Announces Plans to Slash 5,200 Jobs
Associated Press
PLANO, Texas — Electronic Data Systems Corp. will cut 5,200 jobs, or about 4 percent of its worldwide work force, in an attempt to reclaim its leadership in the computer services business.

EDS chairman and chief executive Richard H. Brown put a figure for the first time on a much-anticipated cost-reduction plan.

Brown promised analysts at a meeting in New York on Thursday that the cuts would be coupled with more rapid revenue growth.

"Our aim is to reclaim our leadership and put the luster back" on the company, Brown said in his first meeting with the financial community since taking charge of EDS in January.

EDS has fallen behind IBM and other more aggressive rivals in winning new services contracts as EDS has grown more bureaucratic and its sales force has become complacent, analysts say.

"Our first priority is to re-ignite our growth engines. EDS is in a growth industry. We have got a tremendous opportunity. We will not be satisfied until our growth is in excess of the market growth rate," Brown said.

The job cuts, which will include more than 600 reductions previously announced at EDS' Plano headquarters, should be completed by June, company officials said. Many of the people will be able to apply for vacant positions at the company, officials said.

The company has made largely symbolic cuts already, Brown said, such as reducing its fleet of corporate aircraft and eliminating its executive car program.

James Daley, chief financial officer, said further job cuts may be needed to reach the $1 billion cost savings goal.

Brown said EDS has set out to hire more top guns into its sales force while eliminating the positions of those who aren't performing.

"We're asking those who do not measure up to leave," he said. "In the last 60 days, we've removed the bottom 20 percent of our sales force."

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