Reviving Unisys
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Computer services giant Unisys aims to accelerate "repositioning".
It is a long road from producing the first commercially available typewriter to delivering global IT services - indeed it has taken Unisys 132 years to get where it is today. But despite the longevity of the company, it still has some way to go before that transformation can be said to have been truly successful.
The latest financial results from Unisys were a "disappointment" admitted president and CEO Joseph McGrath. Certainly the $1.63 billion loss posted in its quarter ending 30 September 2005 compares badly to the small profit made in the year-previous quarter ($25.2 million).
But while those figures include a $1.57 billion charge relating to deferred tax assets, the underlying problems of the business are not lost on McGrath - who took over as CEO on 1 January 2005: "We are taking decisive actions to accelerate our repositioning efforts."
First on the agenda is the axing of 10% of its staff - approximately 3600 jobs - in order to save some $250m by 2008. This in itself will result in restructuring charges of approximately 300m over the next year.
But more importantly for Unisys is the ability to make a coherent strategy out of its mixture of server, mainframe and services offerings. In its server business at least, McGrath plans to adopt a "more aggressive partnering model": more manufacturing work will be transferred to NEC.
Unisys also hopes to raise $500 million through the sale of, as yet, undisclosed units. "Frankly they distract or detract from our main focus," said Peter Blackmore, president of worldwide sales and marketing. The proceeds from these divestitures will be used to fund strategic business areas and to pursue complementary acquisitions.
While McGrath's initial aim upon taking the CEO mantle was to oversee the gradual transformation to an IT services business, Blackmore - the former head Hewlett-Packard's worldwide Customer Services group - was brought in to consolidate its dispersed sales, business development and marketing activities. Unisys will look to outsource its software design and technical support costs to operations in Eastern Europe, India and China to help it make its outsourcing offerings competitive.
And it has had some recent success here, with big outsourcing deals with the US Department of Health, Lufthansa Systems, ABN AMRO and the US Federal Bureau of Prisons.
