Update: Computer Sciences Corp. announces restructuring, sale talks

CSC confirms that it is in negotiation to sell.

Computer Sciences Corp. Tuesday confirmed it is in negotiations to sell the company and announced a restructuring plan that will eliminate 5,000 jobs.

The company said it has received several buyout offers, and has retained Goldman, Sachs & Co. to advise it on a possible deal. There is no guarantee that the talks will result in a sale, the company said, adding that it would make no further comment on the discussions until an agreement had been reached.

The talks, with a number of parties, could lead to a deal worth over $10.6 billion, according to a report in Tuesday's edition of the Wall Street Journal, which cited people familiar with the matter. CSC reported revenue of $14.6 billion in the year to Dec. 30, 2005.

To continue reading, register here and become an Insider. You'll get free access to premium content from CIO, Computerworld, CSO, InfoWorld, and Network World. See more Insider content or sign in.

Computer Sciences Corp. Tuesday confirmed it is in negotiations to sell the company and announced a restructuring plan that will eliminate 5,000 jobs.

The company said it has received several buyout offers, and has retained Goldman, Sachs & Co. to advise it on a possible deal. There is no guarantee that the talks will result in a sale, the company said, adding that it would make no further comment on the discussions until an agreement had been reached.

The talks, with a number of parties, could lead to a deal worth over $10.6 billion, according to a report in Tuesday's edition of the Wall Street Journal, which cited people familiar with the matter. CSC reported revenue of $14.6 billion in the year to Dec. 30, 2005.

The company also announced plans Tuesday to cut 4,300 of its 80,000 workers during the current fiscal year, which began April 1, and 700 the following year, it said.

The job cuts will mainly affect the company's European business units, where 24,000 of CSC's staff are employed.

It had been apparent for some time that there was excess capacity in Europe, the company said.

The timing and location of the cuts will depend on local legislation, and on consultation with works councils and employee representatives, the company said. The restructuring will result in charges of $345 million this fiscal year, and $30 million the following year, CSC said. However, it will also result in pretax cost savings of about $150 million for this fiscal year, and $300 million the following year.

CSC offers systems integration and outsourcing services to corporate clients, including U.K. insurance company Aviva and Italian banking group Banca Intesa, and to government agencies. The company has announced a steady stream of contract wins with U.S. government departments in recent months, including one with the U.S. Army in mid-March.

CSC has already come close to a sale before. Last November, according to published reports, it was in negotiation with Lockheed Martin, but the deal fell through.

The IDG News Service is a Network World affiliate.