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Nortel hires CSC for $3B
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August 2, 2000: 9:39 a.m. ET
CSC wins seven-year contract for computer support, management
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CITY (CNNfn) - Nortel Networks Corp., the world's No. 2 network equipment supplier, announced an outsourcing agreement with Computer Sciences Corp. Wednesday worth about $3 billion over seven years.
Computer Sciences, which provides information technology services to commercial and government clients, will provide Nortel with global desktop and help-line support, computer infrastructure management, application development and support, and data-center management.
 Effective October 1, about 2,000 of Nortel's 76,000 employees will transfer to El Segundo, Calif.-based CSC's professional-services team. Under the agreement, Computer Sciences (CSC: Research, Estimates), which has more than 60,000 employees, will provide all transferred Nortel workers a comparable salary and health benefits.
"After a lengthy examination of all the options, we feel that CSC is best-equipped to continue delivering Nortel Networks the world-class services it requires," Richard Ricks, chief information officer of the Ontario-based Nortel, said.
The good news couldn't have come at a better time for CSC; it reported fiscal first-quarter earnings Monday a penny short of Wall Street estimates.
Nortel (NT: Research, Estimates), which won a $300 million contract Tuesday to supply ClearData Communications Inc. with optical and data network equipment, also made news the prior week with its acquisition of Web switch developer Alteon WebSystems Inc. (ATON: Research, Estimates) for about $7.2 billion.
Stock in CSC, which had about $9.6 billion in revenue in its most recent fiscal year, closed Tuesday up 5-15/16 at 67-13/16. Nortel, which had about $21.3 billion revenue in fiscal 1999, closed down 2-1/4 at 72. 
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CSC
Nortel Networks
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