Unisys Corp. today announced plans to cut its workforce and de-emphasize some low-margin businesses and products in the wake of a big drop-off in its earnings for the third quarter.
The Blue Bell, Pa.-based computer maker and professional services firm reported a third-quarter profit of $42.9 million, down 69% from earnings of $138.4 million in the same three months last year. Revenue declined 9% to $1.7 billion during the quarter, compared with revenue of $1.9 billion in the same period last year.
The poor showing in the three months ended Sept. 30 follows lower than expected financial results in the second quarter (see story). Services revenue remained weak in the third quarter, and sales of the company's hardware declined year to year, said Lawrence Weinbach, chairman and CEO of Unisys.
Weinbach said Unisys now plans to reduce its internal cost structure, starting with an early retirement program that will be offered to about 1,500 U.S. employees this quarter. In addition, he said the company plans to focus its resources on a smaller number of businesses through moves such as cutting its portfolio of industry-specific technology offerings from 30 to 15 and de-emphasizing commodity hardware products.
The actions are intended to make Unisys "a more focused, profitable company," Weinbach said. He added that the company will announce more restructuring actions "as they are completed."
More details to come.