Unisys sells stake in Japanese unit, begins layoffs

Unisys has sold most of its stake in its Japanese affiliate, Nihon Unisys, and will use the proceeds to fund the first phase of a move to lay off around 3,600 employees worldwide, the company said in a statement.

Unisys earned gross proceeds of around $374 million from the sale of 99% of its stake in Nihon Unisys, the company said. As a result of the sale, Unisys will record a $145 million pre-tax gain for the first quarter of 2006, it said.

Last week, Unisys said it expected to earn at least $350 million from the sale of shares in Nihon Unisys. The sale will not affect the business relationship between Unisys and Nihon Unisys, the statement said

The first phase of the planned layoff will eliminate around 3,000 jobs at Unisys worldwide and will be funded by proceeds from the share sale. These layoffs will be completed by September, with the remaining 600 jobs to be terminated by year-end, the company said.

Unisys expects the layoffs to result in annual cost savings of $250 million by the end of 2007.