n Dec. 16, 2005, First Data Corp. announced both a 3% workforce reduction, most of which would occur in its struggling card-issuing unit, and a restructuring charge of approximately $0.05 per share taken in the fourth quarter. Additional charges aimed at further reducing overall operating costs would be taken prior to year-end, according to a company statement announcing the news.

"While these decisions are difficult, my focus continues to be on taking the steps necessary to position the company for growth, reduce operating costs and build shareholder value," said First Data Chief Executive Officer Ric Duques. A restructuring charge is a company's estimate of future costs related to a drastic change in business strategy or operations, undertaken to improve future profitability, according to the "Academy of Accounting and Financial Studies Journal."

The generally accepted accounting principle, or GAAP, earnings per share, after the charges, will be lower than the $2.14 to $2.16 that was announced earlier. Duques stated, however, "The company is performing as expected" and "we are pleased with the performance of our Western Union, domestic merchant and international businesses."

Duques held a conference call on Dec. 16 to discuss the layoffs and restructuring charge. He said they "should not be seen as an indicator one way or another of our intentions for [the card-issuing] segment. We are still moving expeditiously through the review." (In November, First Data enlisted Morgan Stanley to provide a "strategic review" of the card unit, which is widely viewed as a precursor to a sale or spin-off.)

During the call, Duques was asked if he will have a final decision on the unit at the annual investors meeting at the end of January 2006. He replied, "I am going to give you an almost 'yes.' That's my objective, either a definitive statement or something that gives a clear direction."

While discussing other steps to improve the company's position, Duques said, "We're looking at things that we can totally eliminate from the company. We're taking a hard look at everything we do and asking, 'Do we really need to do that? Can we outsource it for a lower price?'"