Infineon Pushes Ahead with Restructuring Plans

Outsources HR administration functions to EDS


Munich, Germany, and Plano, TX — October 20, 2003 — EDS and Infineon Technologies AG announced a 10-year, multi-million dollar business process outsourcing (BPO) contract for payroll accounting and major parts of the recruiting function in Germany and Austria.

Infineon, the world's sixth-largest semiconductor company, is continuously working to slim down its corporate structures. Parts of the Infineon workforce will transition to EDS as a result of the agreement.

"By outsourcing our payroll administration and major parts of the recruiting function, we are pressing further ahead with the extensive restructuring measures planned as part of the implementation of our Agenda 5-to-1 corporate strategy," said Dr. Thomas Marquardt, global head human resources. "Taking over personnel processes is where EDS' core competence lies, and so we can further improve the relevant services for employees for our sites in Munich, Regensburg, Dresden, Warstein and Villach and, at the same time, reduce operating costs as a result of the greater transparency and control."

Effective January 2, 2004, EDS said it would assume operating responsibility for the areas concerned, with the transfer of all processes to EDS to be completed by October 1, 2004. The quality of the outsourced functions will be monitored through specification of service descriptions, service levels and key performance indicators (KPIs).

The market research company Gartner Dataquest said it expects the readiness of companies to outsource their human resources administration to an external service provider to increase significantly over the next two years. According to a study released in July 2003, the market for human resources business process outsourcing is expected to grow by 11 percent over the previous year, to a total of US $27.9 billion worldwide. The volume is forecast to reach US $37.8 billion in 2007. Moreover, the aim is not only to reduce costs, but also to improve services.

www.infineon.com

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