CSC To Cut 1,800 Domestic Jobs, Add 2,000 Offshore Workers Message: This is a Type

By Paul McDougall, InformationWeek Wed. August 09, 2006

Computer Sciences Corp., the nation's third-largest outsourcer, says it plans to cut 1,800 jobs in North America by 2008. At the same time, the company will hire an almost equal number of workers in low-wage countries like India over the same period.

CSC also says it may close some facilities, according to a Wednesday regulatory filing by the company. The document, a full quarterly financial report filed with the Securities and Exchange Commission, adds details to restructuring plans previously disclosed by CSC.

In an April 4 announcement, the company said it would cut a total of 5,000 positions worldwide. At the time, CSC said without providing further details that the "majority of these reductions will occur in Europe."

CSC's shift of high-paying U.S. tech jobs to low-wage offshore centers will likely draw ire from labor advocates, especially given the fact that the company holds billions of dollars in federal government tech services contracts funded by American taxpayers.

However, the move should be welcomed by investors and customers anxious to see the company reduce operating costs. Last week, CSC reported a first quarter loss of $55.3 million on revenues of $3.56 billion.

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In Wednesday's filing, CSC said it would cut 1,300 North American jobs by 2007 and an additional 500 by 2008. "Partially offsetting these reductions will be headcount increases in certain lower cost regions," CSC said. It plans to add 2,000 such positions by 2008.

The vast majority of CSC's North American operations are in the United States. It also maintains some facilities in Canada. CSC also said it plans to cut a total of 2,650 jobs in Europe. Its total worldwide workforce currently stands at about 80,000 employees.

As a result of the restructuring, CSC said it will also likely close some facilities. The SEC filing did not name specific locations. The company said it expects the restructuring program to cost a total of $375 million over two years.

CSC officials were not immediately available for comment.