Observers had known of the company’s intentions for some time, thanks to reports of two prior negotiations between the El Segundo, California-based outsourcing heavyweight and potential buyers in the past six months.

But the latest announcement, in which CSC said it had hired Goldman Sachs as a financial advisor and plans to axe some 6% of its workforce to trim excess capacity for a possible sale, indicates that the chances for a finalized buyout are now higher.

CSC made the announcement after a Wall Street Journal report that unnamed sources had indicated the company was in talks about a sale worth a possible $10.6bn, or at least $56 per share.

Similar media reports last October said CSC was negotiating with Lockheed Martin Corp and a group of private equity funds, but the talks broke down in November with CSC reportedly demanding a starting price of $65 per share.

Then in January, HP and private equity firm Blackstone Group apparently sat down with CSC, but the buyout was scuttled when the parties couldn’t agree on the exact terms of purchasing and splitting up CSC’s main businesses.

The current announcement surely has analysts buzzing with talk of potential buyers. Private groups such as Blackstone, Texas Pacific Group, and Walter Pincus could easily be in the running, and Lockheed and HP could still make a move for CSC. Northrop Grumman, which like Lockheed has taken steps to boost its IT business, may also bid, as could CSC’s bigger services rivals IBM and EDS.

The deal could also likely involve dividing CSC into its commercial business and its federal division, which is typically viewed as a high-value operation with good long-term contract potential. CSC said it wouldn’t disclose any further developments of any transaction until the board has approved a plan.

As for the job cuts, CSC said they would mostly be in Europe, where business has fallen off lately. Some 4,300 of the cuts will come in the current FY2007, and the remaining 700 will come the following year. These 5,000 positions make up 6% of CSC’s overall workforce. The company expects related pre-tax restructuring charges of $345m in FY2007 and $30m in FY2008, but it plans to save $150m in FY2007 and $300m the next year as a result.

CSC shares bumped up more than 4% on heavy trading to close at $59.80 following the news, and at one point shares eclipsed their 52-week high of $59.90.