Unisys shares were down as much as 8 percent in early trading after the Blue Bell-based computer service company's chief executive, Peter Altabef, told investors sales were down 5 percent in the past three months, due largely to weaker foreign revenues as the U.S. dollar strengthened.
The company plans an 8 percent "worldwide" reduction in its workforce, which totalled 23,000 last year. Severance and restructuring will cost $300 million, resulting in $200 million in yearly savings, the company added.
Unisys says its U.S. and Federal Government sales were stronger this year. The company recorded a quarterly loss of $43 million, or 87 cents a share, on revenues of $721 million, down from $767 million last year, after considering the impact of weaker foreign currencies.
In a report to clients of Technology Business Research, analyst Elitsa Bakalova said Unisys's falling revenues on its operations, more than half of which are outside North America, forced Altabef to cut 1,800 staff and related operations, including sales costs, and that management changes under Altabef will accelerate.
She added that the company's Stealth cybersecurity system will likely boost government sales and a deal with SAP to provide cloud services for HANA in-memory database applications will likely lead to more partnership business.