EDS considering cost cuts, spin-offs

NEW YORK: Electronic Data Systems Corp., with its stock reeling after an earnings warning, is considering moves including cost cutting and spinning off divisions, according to Financial Times Online

Dick Brown, the chief executive of the global computer services firm that is second only to IBM, wrote a letter to shareholders that said the company was mulling the changes as well as reconsidering its strategy of chasing multibillion dollar contracts that take years to produce revenues, the article said.

The company is also investigating how it failed to foresee the huge drop in earnings and revenue, the article said. It quoted Brown as saying that the company's management team should "accept full responsibility for our performance this quarter."

Shares of EDS have tumbled 62 percent since Sept. 18, when the company warned of a severe shortfall in earnings and revenue for its third quarter, citing a chronic slowdown in technology spending by its customers.

© Reuters