Unisys to shed 1,400 workers

Got a tax refund too

By Lucy Sherriff • Get more from this author

Posted in Financial News, 7th October 2004 14:11 GMT

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Unisys is waving goodbye to 1,400 workers and getting rid of unused facilities, to save $70m a year by the end of 2005.

The computer services firm will take a one-time $63m charge to earnings for the actions, the equivalent of 19 cents per share in Q3, and estimates the moves will need $85m in cash during 2005.

Separately, the US Congressional Joint Committee on Taxation has approved an income tax refund of $40m, which, after local taxes and an adjustment of Unisys' tax liability reserves, will provide a $30m cash boost. It can also now adjust its tax liability reserves following the settlement, resulting in an overall benefit to the company of $70m.

For Q3 The net effect of the tax benefit and cost reduction charge will be $7m, or two cents per share, for the quarter, the company said.

However, its guidance for the quarter remained unchanged, with earnings expected to fall between eight and 12 cents per share and $40m, compared to $56.2m, or 17 cents per share in Q3 last year. ®