EDS Seeks to Cut Costs by Merging Financial Divisions

Electronic Data Systems Corp. has started tackling its overhead problem by merging two prominent business units.

Plano, Tex.-based EDS, which provides computer services to a broad range of industries, melded its banking and securities unit with the credit services division. The resulting 7,600-employee group has annual revenues of about $2 billion.

EDS as a whole had $14.4 billion in revenue last year.

John A. Meyer, who led credit services, is president of the combined unit and reports to Coley Clark, senior vice president. Bobby Grisham, who led the 3,000-employee banking and securities unit, will remain at EDS in an undetermined capacity.

Besides the potential administrative cuts, Mr. Meyer said EDS' move addresses changes in the financial services industry.

"We see a lot of banks and securities firms creating finance subsidiaries," he said. The lines that divide credit services, banking, and securities "have blurred so much" and EDS can offer "complementary skills," he said.

The restructuring was likely the result of an ongoing review of operations. EDS and its management consulting unit, A.T. Kearney, have vowed to reduce the work force and eliminate $250 million in costs in the second half of 1997. The review identified additional cuts of $500 million to $750 million in 1998.

EDS also expects to take a one-time restructuring charge of $100 million to $250 million in the second or third quarter.

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