Computer Associates is laying off roughly 5 percent of its worldwide staff this week in a move to reduce costs amidst the slowed economy.
In all, nearly 900 of the company's 18,000 employees will be affected by the cuts, which were made Thursday. The majority of layoffs are in North America, reportedly in upper and mid-level management positions.
President and CEO Sanjay Kumar, in a statement announcing the staff reductions, said the moves will bring CA's staffing levels more in line with the new business model unveiled by CA last year and "reflect the complex realities that our company and many other companies are faced with today."
Kumar said the severance packages for affected employees includes salary continuation through the end of the month, extra severance pay measuring two weeks salary per year of service, and "enhanced benefits" paid for by CA, including tuition reimbursement, career counseling and temporary day care services.
Charges associated with the layoffs will cost the company approximately $20 million in the third quarter.
Analysts expect the company to report pro forma net earnings of about 52 cents a share when it releases earnings next week for its second quarter, ended Sept. 30.