According to a well-placed ZDNet Australia source, EDS management here has been in meetings this morning in order to determine how the cuts - believed to be in the order of 15 percent of the company's workforce - will be distributed throughout the Asia Pacific region.
A spokesperson for EDS Australia was unable to rule out any cuts, saying that the company was considering a number of cost reduction options.
"There is no directive in place at this time for company-wide workforce reductions," the spokesperson said. "Nothing is off the table at this point but we have nothing to confirm."
EDS' chief executive officer, Dick Brown, reportedly indicated in a recent letter to shareholders EDS would be taking action to reduce overhead costs across the company, reprioritise sales and "address underperforming assets" in the light of its financial difficulties.
The source indicated the job cuts were expected to kick off in the US within a week, and soon follow in Europe and the Asia-Pacific. While it is unclear at this stage which areas of the company are likely to be most affected, the most likely scenario is a flat rate cut of 15 percent across the board. This would see as many as 21000 jobs slashed across the globe, 1050 of which would be lost in Australia.
EDS warned in mid-September its third-quarter earnings would be around 12 cents to 15 cents per share, a dramatic reduction from Wall Street's expectations of 74 cents per share. In addition, EDS last month acknowledged that its stock-hedging efforts backfired and cost the company more than US$200 million.
Stock hedging backfired, eh? Simple solution - trim the senior managers responsible for that and use those savings to offset some of the cuts to the EDS employees who actually do the work and really bring in the money for EDS.