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Unisys to Split Into 3 Units as Part of Reorganization : Shake-up: Computer maker to cut jobs, take charge against earnings.

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From Reuters

Unisys Corp., the computer maker that has struggled to regain its former glory, said Friday that it would dismantle its management structure and form three businesses with distinct sales forces.

The restructuring will result in job losses and a significant charge against earnings, the company said, though company officials would not elaborate.

The announcement marked the fifth financial or organizational shake-up at the company since 1991, when Unisys took a $1.2-billion charge and cut 10,000 jobs in one of its early steps away from mainframe computers.

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Industry analysts said that although the moves planned by the Blue Bell, Pa.-based company were significant, they were not as dramatic as the recent announcement by AT&T; Corp. to split itself into three separate companies.

“I would like them to break up the company. It doesn’t appear that they are going to do it,” said Al Kingsley of Greenway Partners. “It looks like a little step in the right direction.”

Unisys, formed in 1986 through the merger of Sperry and Burroughs, two early industry leaders, makes computer systems and related products for commercial markets.

Once a key maker of mainframe computers, it started restructuring in 1991 to focus on information-management systems. Its most recent move before the latest announcement was the sale of its defense business in May.

Chairman James Unruh said the three new divisions will be computer systems, information consulting and integration services, and global support services.

“The first is a hardware/software products business, and the other two are services driven,” he said in a statement.

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Each of the new divisions will have its own sales force, and the company’s existing management structure will be dismantled.

Last year Unisys earned $100 million on sales of $7.4 billion. Officials said they wanted to trim at least $400 million from its cost structure by the end of 1996, meaning that the job cuts announced could be significant.

Unisys stock added 37.5 cents to close at $8.25 in trading on the New York Stock Exchange.

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