Unisys reported a third-quarter loss on Tuesday and revealed plans to cut 10 percent of its staff, or about 3,600 workers, in an effort to focus its business and reduce costs.
The net loss for the quarter was $54.3 million, or $0.16 per share, compared to net income of $25.2 million, or $0.07 per share, in the third quarter last year. The results are preliminary and the company said they may change after a review of a deferred tax asset.
Revenue in the quarter dropped 4 percent to $1.39 billion from $1.45 billion in the same quarter last year.
The company blamed low orders for the quarterly loss. Specifically, services orders were significantly down and sales were weak in its high-end server business.
To address those shortfalls, Unisys will begin to concentrate on areas with growth potential such as outsourcing, open source, and Linux, Microsoft-based systems and security, the company said. Unisys also plans to divest some areas of business and improve its sales and marketing efforts.
The layoffs will come as part of the focus on the growth areas. Unisys expects that the downsizing will result in $250 million in annualized cost savings by the end of 2007 and will cost about $250 million to $300 million through 2006.
Despite disappointing results for the quarter, Unisys President and Chief Executive Officer Joseph W. McGrath said in the statement that he expects the fourth quarter will be profitable, dependant on closing some big deals. Earnings for the final quarter will be between $0.10 and $0.15 cents per share, he said.
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