"The steps we're outlining today will make us a stronger company strategically and financially," EDS chief financial officer Bob Swan said in a statement.

EDS would eliminate wasteful processes and duplications in selling, general and administrative costs, leading to savings starting from next year, Swan said.

"Subject to appropriate local regulations and consultation, the company also will eliminate approximately two percent of its global workforce," the company said in a statement.

EDS has about 137,000 staff in 60 countries.

The company, unveiling restructuring plans under new chairman and chief executive Michael Jordan, said it expected annualized pre-tax savings of 230 million dollars.

"We are taking steps to position EDS as the services provider of choice for business leaders looking to extract the highest returns on IT (information technology) investments," Jordan said.

EDS would take a restructuring charge of up to 475 million dollars against earnings this year.

"We will decisively focus on EDS' extensive capabilities in its core outsourcing business, while addressing contract performance issues," the company said.

"We are also strengthening our balance sheet and improving capital flexibility through better cash utilization, stronger free cash flow, strategically accessing capital markets and pursuing sales of noncore assets."

EDS said it planned to raise about 250 million dollars by selling off other non-core assets this year.

The group ended the first quarter this year with 1.5 billion dollars of cash on hand.

It aimed to have 1.4 billion dollars to 1.7 billion dollars in cash by the end of this year, including asset sales, a 500 million to 700 million debt raising on the financial markets, and free cash flow.

SPACE.WIRE