Unisys to cut 2,000 jobs, may sell federal services unit

Unisys Corp. said two months ago that job reductions and other corporate changes were in the works because of declining revenue and profits. Today, the ax fell.

The company announced that about 750 U.S. workers have accepted early retirement incentive packages, while another 1,250 around the world will be laid off -- most by the end of the month. The company has approximately 36,000 employees.

The Blue Bell, Pa.-based computer company also said that it's considering selling its federal computer services division.

At a meeting with analysts today in New York, the company outlined several initiatives to fuel what it calls its "growth agenda" to increase profitability. Among the new targets are providing services to e-businesses, expanding outsourcing to get out of the "middleman" business and creating alliances to boost sales.

In a statement, Unisys Chairman and CEO Lawrence A. Weinbach said the company is moving to exit low-margin hardware acquisition businesses for customers through a new agreement with Ingram Micro Inc. in Santa Ana, Calif. Under the agreement, Unisys will provide a Web-based channel for its customers to buy from Ingram Micro some 280,000 products from about 1,700 suppliers.

Unisys spokesman Brian Daly said the moves will help the company as it continues to reshape itself.

"We're focusing very much in services and technologies where we can provide a value-add for customers moving into e-business," Daly said.

Earlier this week, Unisys announced a new initiative with Dell Computer Corp. to sell Unisys servers and services to the Round Rock, Texas-based company. Dell will sell cellular multiprocessing servers with under its own name.

In October, Unisys said it would cut its workforce and de-emphasize low-margin businesses and products in the wake of a big drop-off in its earnings for the third quarter (see story).

The firm had reported a third-quarter profit of $42.9 million for the quarter ended Sept. 30, 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.

That poor showing followed lower-than-expected financial results in the second quarter (see story).

Copyright © 2000 IDG Communications, Inc.

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