EDS investing £30m in storage as jobs face axe

Sep 30 2008 by Karen Dent, The Journal

INFORMATION firm Electronic Data Systems is investing £30m in a new data storage centre at Wynyard Park, at the same time the company is expected to shed thousands of jobs after being take over by Hewlett Packard.

EDS, the Government’s biggest IT services supplier which also has private sector clients including British Airways, BP, Rolls-Royce and Royal Bank of Scotland, is moving into a 300,000sqft warehouse on the Teesside business park.

The building was originally a speculative development by HelioSlough, which was sold to BA Pension Trustees. Recently in the news following the loss of prison officers’ data, EDS also handles work for the Ministry of Defence and the Department for Work and Pensions.

The information company said it intends to convert the Wynyard Park site into a hi-tech data centre, but it would not say what type of work would be handled there.

It also refused to comment on whether it will employ new staff at the Teesside site or whether it will be used to consolidate workers from its Sunderland, Newcastle, Washington, Peterlee and Darlington offices, which employ around 2,500 people.

The picture has been complicated by HP’s $13.9bn takeover of EDS earlier this month. HP immediately announced plans to cut 24,600 jobs worldwide. EDS staff are expected to bear the brunt of the cuts, half of which will be in the US.

The Public and Commercial Services Union (PCS), said it feared more than 3,000 jobs – or one in five of EDS’s 15,000-strong UK workforce – could be lost because of the HP deal.

The union, which represents about 800 EDS workers in the North East, said it was unclear why the company had bought the Wynyard building.

“It raises more questions than answers, given what is going on with the company. We’ll be raising it with management to see what its plans are for that site and to see how that effects other sites in the North East,” a PCS spokesman said.

“It may be good news for EDS for the region but it may be not. We need to clarify the situation.” The Teesside site will not be ready to move into immediately but Matt Johnson, development manager at Wynyard Park, said the 18-month “fit out period” had begun ahead of staff starting work.

He said it was a coup for the business park to attract a business of EDS’s calibre: “EDS is a worldwide company and we do have other plcs at Wynyard Park, such as ConocoPhillips and Capgemini. EDS will be up there with them. On turnover and revenue, EDS will be one of the biggest in there.”

EDS looked at a number of North East sites before opting for Wynyard.

“We were impressed by the quality of the site and the exceptional facilities and services which Wynyard Park offered,” said EDS UK managing director Sean Finnan.