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4/6/2006
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EDS Plans Tenfold Increase In India Staff Size By 2008

EDS, which now has 3,000 workers in India, plans to increase its workforce there by both making acquisitions and hiring individuals.

Electronic Data Systems' proposed acquisition of a controlling stake in Indian IT and business services outsourcer Mphasis BFL Ltd. marks the beginning of an aggressive campaign by the Dallas-based company to dramatically increase its staff size in India, an EDS spokesman said Thursday.

Mphasis would add 11,000 Indian employees to EDS' present complement of 3,000, giving it a total of 14,000 Indian workers. By the end of 2008, EDS wants to have 28,000 IT and business services workers in the country, the spokesman said. EDS' plan to increase its Indian workforce will be realized through both acquisitions and individual hirings, the spokesman noted. EDS employs 51,000 workers in the United States--about 42% of its worldwide workforce.

EDS says it's offering $380 million to acquire a 52% stake in Mphasis. The offer represents a 30% premium over Mphasis' average share price over the past six months. Mphasis' directors are encouraging the company's shareholders to accept the deal. Mphasis provides a range of IT and business services from India, including application maintenance and development, transaction processing, and customer relationship management. It focuses primarily on the financial services sector.

EDS isn't the only major U.S. tech firm eyeing big expansion in India, where hourly wages for programmers and other IT workers range anywhere from 60% to 80% less than prevailing domestic rates. Last month, IBM officials said the company would likely raise its Indian headcount to 55,000 or more over the next year--a 40% increase over current levels. Dell said it may add 10,000 workers in India over the next three years, effectively doubling its presence there. On Tuesday, Computer Sciences Corp., which is currently looking for a buyer, announced the opening of its fourth Indian facility--a development center in Chennai. CSC plans to hire 5,000 to 7,000 workers over the next two years, the company says.

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