Unisys ( UIS) will cut its workforce by 10% -- about 3,600 people worldwide -- to restructure its business and boost profitability, the company announced Monday. Unisys also completed its sale of 30.2 million, or 99%, of the shares it owns in Nihon Unisys Ltd. (NUL) of Japan. Gross proceeds from the
planned divestiture were $374 million and the company will recognize a pretax gain of approximately $145 million in the first quarter of 2006. NUL will continue to be the exclusive distributor of Unisys hardware and software products in Japan. "These changes will have some short-term impact on the business but we are confident that they will drive tangible results as we move into 2007," Unisys CEO Joe McGrath said in a statement. "While 2006 is a transition year, we remain focused on our long-term objectives, which are to fundamentally change our business, enhance profitability and attain the financial goals we set for ourselves by 2008." The employee cuts are expected to yield about $250 million in annualized cost savings on a run-rate basis by the end of 2007. McGrath said the company would also "realign (its) sales, marketing and delivery efforts to focus on (its) core growth markets and drive profitable growth over the long term." In addition, Unisys announced it sold part of its Unigen semiconductor test equipment business to Cohu ( COHU) as part of its plan to divest itself of noncore assets of the business. Shares of the IT services firm rose 12 cents, or 1.7%, to $7.10 in recent trading.