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Data & Research December 23, 2008
Unisys Cuts 401(k) Match
Unisys Corporation is suspending its 401(k) plan matching contribution to save $50 million annually as part of a series of cost-cutting moves designed to slash its expenses by more than $250 million.
Reported by Fred Schneyer
A Unisys news release said the company was also cutting 1,300 positions around the world and that the reductions had begun and were expected to continue through 2009. The company also plans to forgo 2009 salary increases in most of its markets.
The initial “cost-reduction actions are focused on reducing expenses and controlling or reducing labor costs across the board,” Unisys said.
The company Web site statement said the expense cuts also include reductions in third-party expenses and facility consolidations.
“The cost-reduction actions are part of an overall program, led by new Unisys Chairman and CEO Ed Coleman, to simplify the company’s business structure, concentrate its resources more effectively, and drive improved market success and profitability,” Unisys said in the statement.
Unisys expects to take a fourth-quarter 2008 restructuring charge in the $80 to $85 million range to fund its consolidation.
According to a Reuters news report about the cutbacks, the Blue Bell, Pennsylvania-based Unisys has had an extremely difficult year with its shares plummeting around 88%. Last month, Standard & Poor’s removed the company from the S&P 500 index.
The company’s stock now trades at under $1.
While Unisys joins a number of other companies making the 401(k) match suspension move, most employers have not yet followed suit. A recent PLANSPONSOR survey found 58% of polled NewsDash readers were not planning any match changes (see “SURVEY SAYS: What Are Your Plans for Your Match?’).