EDS lays off NMCI workers

Electronic Data Systems Corp. has laid off 10 percent of the staff for the Navy Marine Corps Intranet following the debate between Navy and Pentagon officials over how the system should be tested.

NMCI Information Strike Force—the corporation of NMCI contractors led by EDS—cut about 300 jobs, said EDS spokesman Chris Grey. The layoffs affected EDS and its subcontractors.

Those cuts come in the wake of delays that resulted from the debate between officials in the Pentagon and Navy about the level of testing the system should undergo. Those talks and the resulting agreement signed this month reduce the number of seats EDS will be able to roll out in the coming months.

The cuts are seen as a short-term measure to deal with the delay from EDS' original schedule. "Those staffing levels were appropriate to meet the original rollout schedule," Grey said. NMCI Information Strike Force plans to increase staffing in the near future.

The testing agreement outlines an event-driven timetable for the Navy's $6.9 billion effort to outsource its network infrastructure. The next milestone on that schedule comes in early winter. If the Pentagon certifies the tests on the system, the Navy and EDS will be able to roll out more seats, at which time EDS would need to hire people back.

Grey said EDS has tried to reassign the affected people elsewhere within the firm and has asked the subcontractors to do the same, if possible.

The staffing changes were made before the Sept. 11 terrorist attack on the Pentagon, Grey noted. The work needed to repair the Pentagon could shrink the number of people affected, although EDS officials did not know to what degree it would impact the overall number of layoffs.