EDS Offers Early Retirement To 9,200 Employees

EDS calculated the charge by assuming that half the eligible workers will accept the retirement offer.

The company said it expected that client business would require filling fewer than half the openings created by retirements. If that is so, the company said, it could save about $150 million next year and about $250 million a year starting in 2006.

Plano, Texas-based EDS is struggling to recover from money-losing contracts and a downturn in technology spending. On Monday, the company delayed filing its third-quarter financial results, citing a disagreement with outside auditors over writing down the value of assets used in a big contract to build an Intranet system for the Navy and Marine Corps.

The company also repeated its previous estimate of 2004 revenue between $20 billion and $21 billion and earnings of 20 cents to 30 cents per share, excluding items such as the retirement-related charges.

The early-retirement offer will be made to most U.S. employees who will be at least 50 years old and fully vested in the company retirement plan by the end of the year. EDS employs 53,000 workers in the U.S. and 119,000 worldwide.

The offer will not be extended to employees who work on EDS' largest account with General Motors, on government accounts that require security clearances, or at the A.T. Kearney consulting unit, said EDS spokeswoman Liz Bonet.

EDS said about $20 million of the charge will be in cash, mostly paid next year to continue health care benefits. The remainder will be related to increased pension liabilities and accelerated vesting of stock compensation.

EDS portrayed the buyouts as part of a work force-management program. The company said it also expects to retrain more than 20,000 programmers in new areas of technology strategy.

Shares of EDS rose 96 cents, or 4.8 percent, to close at $20.99 Tuesday on the New York Stock Exchange.

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