EDS replaces U.S. employees with cheap foreign workers

Date: Thursday, September 13, 2007 4:11 AM

<<<<< JOB DESTRUCTION NEWSLETTER No. 1755 -- 9/13/2007 >>>>>

One thing the CEO of EDS has to be given credit for -- he doesn't beat around
the bush. He said he is going to replace his more expensive U.S.
employees with cheaper workers from India, Brazil and the Czech Republic.

EDS will eliminate their U.S. employees by a mass layoff of about 11% of their
workforce. Employees must accept what EDS calls a benefit offer of early
retirement and $10,000 cash by Oct. 30. None of the articles I have read
explain what happens if employees don't accept this so-called offer.
If any of you EDS people know the answer shoot me an email.

EDS might be very eager to get rid of American workers in order to cut
salaries but they sure don't seem to mind paying mega-bucks to their CEO.
In the year 2006 Ronald Rittenmeyer was paid about $5.4 million by EDS. To
find out more about him go to this page:

http://investing.businessweek.com/research/stocks/people/person.asp?personId=838857&symbol=EDS

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http://www.eweek.com/article2/0,1895,2182591,00.asp

EDS Offers 11% of Work Force Early Retirement September 12, 2007

By Deborah Perelman
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.

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.

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.

Check out eWEEK.com's Careers Center for the latest news, analysis and
commentary on careers for IT professionals.

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http://www.boston.com/business/globe/articles/2007/09/13/eds_offers_buyouts_to_12000/

EDS offers buyouts to 12,000
By Bloomberg News | September 13, 2007

Electronic Data Systems Corp., the second-largest computer-services company,
plans to offer early retirement to 12,000 employees, a quarter of its US
workforce, after orders plunged last quarter.

The cost of the cuts will be $70 million to $130 million in the fourth
quarter, the company said in a regulatory filing. Employees have until Oct.
30 to accept the severance package, EDS said yesterday.

EDS shares have dropped 17 percent since Aug. 1, when the computer services
provider said bookings fell 20 percent last quarter. Chief executive Ronald
Rittenmeyer, who took over Sept. 1 from Michael Jordan, is hiring workers in
India to replace more-expensive US employees and revive profit.

"Employees that were at the forefront of IT service provision 20 years ago
don't have the same skill sets they need today," said Joseph Vafi, an analyst
at Jefferies & Co. in San Francisco. "Increasingly, you can find those around
the world."

EDS, whose customers include General Motors Corp. and Commonwealth Bank of
Australia, faces competition from International Business Machines Corp., the
biggest computer-services provider, and Indian outsourcing companies such as
Tata Consultancy Services Ltd.

Shares fell 49 cents to $21.89 in New York Stock Exchange composite trading.

Founded by H. Ross Perot in 1962, the company has about 50,000 US employees
and 136,000 globally. Officials don't have an estimate for how many will take
the offer or what the savings may be, spokesman Bob Brand said. The decision
is separate from any job cuts the company may make later, said spokesman Bob
Brand said.

EDS will pay the costs from its pension plan, he said, and related expenses
won't hurt cash flow.

Outsourcing companies are hired to manage computers, set up networks, run
finance and human-resources services, and develop and integrate software.
Those can be labor-intensive jobs, and it's cheaper to pay workers overseas to
handle the tasks.

EDS plans to increase its workforce in emerging markets to 45,000 by the end
of next year, up from 38,000, mainly in India, Brazil, the Czech Republic,
Hungary, and China.

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http://in.news.yahoo.com/070912/137/6kolp.html

EDS offers retirement to 12,000 U.S. workers

By Reuters
Thursday September 13, 01:45 AM
NEW YORK (Reuters) - Technology services company Electronic Data Systems Corp,
on Wednesday said it offered early retirement to about 12,000 U.S.
employees, nearly a quarter of the U.S. work force, and expected a charge of
$70 million to $130 million in the fourth quarter.

EDS, which ranks second by revenue after International Business Machines Corp
among U.S.-based technology-services companies, has been boosting profit by
cutting costs, including 5,000 jobs last year, and generating revenue from
contracts including a $3.9 billion deal from the U.S. Navy last year.

"It's an initiative as part of EDS's ongoing plan to improve our cost
structure and competitiveness," a spokesman said of the new plan.

Earlier this month, Ronald Rittenmeyer assumed the role of chief executive,
succeeding Michael Jordan, who during his four-year tenure helped EDS overcome
weak technology demand and market share losses to IBM.

EDS, which has about 136,000 employees worldwide and 50,000 in the United
States, said the size of the final charge might be greater or lesser than its
estimate, depending on the number of employees who accept the offer.

The company said it announced the offer to its staff on Sept. 11 after the
board authorized it on Sept. 7. It gave employees until Oct. 30 to accept the
offer, according to a filing with the U.S. Securities and Exchange Commission.

EDS plans to offer eligible employees an "enhanced" benefit equal to five
times the allotted annual funds made to their company retirement plan,
excluding interest credits. If applicable, EDS will also offer a benefit to
the employees' Benefit Restoration Plan on their behalf, plus $10,000 from the
EDS Retirement Plan.

Jordan continues to serve as chairman and executive officer of the Plano,
Texas, company.

Shares of EDS slipped 2.3 percent to $21.86 on the New York Stock Exchange.
The stock is off about 22 percent since Rittenmeyer was named CEO in July.

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