Organization of Information

Management's discussion and analysis of financial condition and results of operations ("MD&A") is provided as a supplement to our consolidated financial statements and notes thereto included in Item 8 of this Form 10-K and to provide an understanding of our consolidated results of operations, financial condition and changes in financial condition. Our MD&A is organized as follows:

o Executive Overview - This section provides a general description of our business segments and provides a brief overview of the results of operations during the accounting period.

o Results of Operations - This section provides our analysis of the line items on our summary of operating results by segment for the current and comparative accounting periods on both a company-wide and segment basis. The analysis is in both a tabular and narrative format.

o Liquidity and Capital Resources - This section provides an analysis of our liquidity and cash flows, as well as our discussion of our commitments, securitization program and credit lines.

o Critical Accounting Policies - This section discusses those accounting policies that are considered to be both important to our financial condition and results of operations and require us to exercise subjective or complex judgments in their application.

o New Accounting Pronouncements - This section includes a discussion of recently published accounting authoritative literature that may have an impact on our historical or prospective results of operations or financial condition.

o Related Person Transactions - This section describes any business relationships, or transaction or series of similar transactions between the Company and its directors, executive officers, shareholders (with a 5% or greater interest in the Company), or any entity in which any such person has more than a 10% equity ownership interest, as well as members of the immediate families of any of the foregoing persons during the fiscal years 2007 and 2008. Excluded from the transactions are employment compensation and directors' fees.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--Continued

Executive Overview

Volt Information Sciences, Inc. ("Volt") is a leading national provider of staffing services and telecommunications and information solutions with a material portion of its revenue coming from Fortune 100 customers. The Company operates in four segments and the management discussion and analysis addresses each. A brief description of these segments and the predominant source of their sales follows:

Staffing Services: This segment is divided into three major functional areas and operates through a network of over 300 branch offices.

o Staffing Solutions provides a full spectrum of managed staffing, temporary/contract personnel employment, and workforce solutions. This functional area is comprised of the Technical Resources ("Technical") division and the Administrative and Industrial ("A&I") division. The employees and contractors on assignment are usually on the payroll of the Company for the length of their assignment and are then eligible to be re-assigned to another customer. This functional area also uses employees and subcontractors from other staffing providers ("associate vendors") when necessary. This functional area also provides direct placement services and, upon request from customers, subject to contractual conditions, will allow the customer to convert the temporary employees to full-time customer employees, under negotiated terms. In addition, the Company's Recruitment Process Outsourcing ("RPO") services deliver end-to-end recruitment and hiring outsourced solutions to customers. The Technical division provides skilled employees, such as computer and other IT specialties, engineering, design, life sciences and technical support. The A&I division provides administrative, clerical, office automation, accounting and financial, call center and light industrial personnel. The length of an employee's assignments in the Technical division may be as short as a few weeks but in many cases can last for six to twelve months. Assignments in the A&I division are generally shorter than in the Technical division.

o E-Procurement Solutions provides global competitively bid human capital acquisition and management solutions by combining web-based tools and business process outsourcing services. The employees and contractors on assignment are usually from associate vendor firms, although at times, Volt recruited contractors may be selected to fill some assignments, but in those cases Volt competes on an equal basis with other unaffiliated firms. The Company receives a fee for managing the process, and the revenue for such services is recognized net of its associated costs. This functional area, which is part of the Technical division, is comprised of the ProcureStaff operation.

o Information Technology Solutions provides a wide range of services including consulting, outsourcing and turnkey project management in the software and hardware development, IT infrastructure services and customer contact markets. This functional area offers higher margin project-oriented services to its customers and assumes greater responsibility in contrast to the other areas within the segment. This functional area, which is part of the Technical division, is comprised of the VMC Consulting operation.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--Continued

Executive Overview--Continued

Telecommunications Services: This segment provides a full spectrum of turnkey telecommunications and related services solutions for commercial and government sectors. It designs, engineers, constructs, installs and maintains voice, data, video and utility infrastructure for public and private businesses, military and government agencies. This segment also installs distribution piping for potable and re-use water systems for municipalities.

Computer Systems: This segment provides directory and operator systems and services primarily for the telecommunications industry and provides IT maintenance services. The segment also sells information service systems to its customers and, in addition, provides an Application Service Provider ("ASP") model which also provides information services, including infrastructure and database content, on a transactional fee basis. It also provides third-party IT and data services to others. This segment is comprised of VoltDelta, Volt Delta International, LSSiDATA and the Maintech computer maintenance division.

Printing and Other: This segment provides printing services and publishes telephone directories in Uruguay. The telephone directory revenues of this segment are derived from the sales of telephone directory advertising for the books it publishes. The operations of this segment were part of the Telephone Directory segment until the current quarter. In September 2008, the Company sold the net assets of its DataNational and Directory Systems divisions, whose operations for the current and prior fiscal years have been reclassified to Discontinued Operations in these financial statements, with the remainder of the segment being renamed Printing and Other.

The Company's operating segments have been determined in accordance with the Company's internal management structure, which is based on operating activities. The Company evaluates performance based upon several factors, of which the primary financial measure is segment operating profit. Operating profit provides management, investors and equity analysts a measure to analyze operating performance of each business segment against historical and competitors' data, although historical results, including operating profit, may not be indicative of future results, as operating profit is highly contingent on many factors, including the state of the economy and customer preferences.

This report includes information extracted from consolidated financial information that is not required by Generally Accepted Accounting Principles ("GAAP") to be presented in the financial statements. Certain of this information is considered "non-GAAP financial measures" as defined by SEC rules. Some of these measures are as follows:

Gross profit for a segment is comprised of its total net sales less direct costs.

Segment or division operating profit is comprised of segment or division gross profit less its overhead, selling and administrative costs and depreciation, and has limitations as an analytical tool. It should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Some of these limitations are due to the omission of: (a) general corporate expenses; (b) interest income earned by the Company on excess cash generated by its segments; (c) interest expended on corporate debt necessary to finance the segments' operations and capital expenditures; and (d) interest and fees related to sales of interests in accounts receivable. Because of these limitations, segment or division operating profit (loss) should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--Continued

Executive Overview--Continued

Overhead is comprised of indirect costs required to support each segment's operations, and is included in cost of sales in the statements of operations, along with selling and administrative and depreciation expenses, which are reflected separately in the statements of operations.

General corporate expenses are comprised of the Company's shared service centers, and include, among other items, enterprise resource planning, human resource, corporate accounting and finance, treasury, legal and executive functions. In order to leverage the Company's infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions are included within general corporate expenses as they are not directly allocable to a specific segment.

Several historical seasonal factors usually affect the sales and profits of the Company. The Staffing Services segment's sales and operating profit are always lowest in the Company's first fiscal quarter due to the Thanksgiving, Christmas and New Year holidays, as well as certain customer facilities closing for one to two weeks. During the third and fourth quarters of the fiscal year, this segment benefits from a reduction of payroll taxes when the annual tax contributions for higher salaried employees have been met, and customers increase the use of the Company's administrative and industrial labor during the summer vacation period. Due to the fact that the Company's fiscal year-end is the last Sunday closest to the end of October, periodically its fiscal year is comprised of 53 weeks. Fiscal year 2008 was comprised of 53 weeks.

The demand for the Company's services in all segments, both domestically and in its foreign operations, is dependent upon general economic conditions. The Company's business tends to suffer during economic downturns, such as the current recession. The slowing of the economy during the fourth quarter of fiscal 2008 has adversely affected the Company's revenue and operating profit.

In fiscal 2008, the Company's consolidated net sales totaled $2.4 billion and consolidated segment operating loss totaled $4.5 million. The explanations by segment for fiscal 2008 are detailed below.

Staffing Services: The Staffing Services segment's net sales for fiscal 2008 increased by $72.9 million, or 4%, from the prior year. Since the sales for this segment are substantially related to the number of weeks in the fiscal period, approximately half of the sales increase was related to the extra week in the fiscal year. The operating profit for fiscal 2008 decreased by $13.1 million, or 24%, from fiscal 2007. The decrease in operating profit in fiscal 2008 was due to a goodwill impairment charge of $4.9 million in fiscal 2008, a decrease in gross margin percentage and an increase in overhead, partially offset by the increase in net sales.

Telecommunications Services: The Telecommunications Services segment's sales increased by $52.0 million, or 43%, from the 2007 fiscal year, however, the operating results decreased by $27.6 million. The decrease in operating results for fiscal 2008 was due to a decrease in gross margin percentage and increased overhead costs. In late January 2008, the Company learned that it may not be reimbursed for certain costs estimated and recorded under an installation contract and the increase in operating loss for the year was primarily due to the losses estimated and recorded on this contract. The increase in overhead was predominantly due to increased indirect labor and equipment costs related to this contract. The Company continues to negotiate with the customer in order for it to be reimbursed for disputed billings under this contract. The installation work on this contract is complete.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--Continued

Executive Overview--Continued

Computer Systems: The Computer Systems segment's sales increased by $13.4 million, or 7%, from the 2007 fiscal year, while its operating results decreased by $54.4 million, or 172%, in fiscal 2008. The decrease in operating results in fiscal 2008 was due to a goodwill impairment charge of $41.5 million in fiscal 2008, the increased overhead costs as a result of the acquisition of LSSi, which included $1.5 million of severance costs and increased amortization of intangible costs related to the acquisition.

Printing and Other: On September 5, 2008, the Company sold the net assets of its directory systems and services and North American telephone directory publishing operations to Yellow Page Group ("YPG"). The net purchase price of $179.3 million was paid in cash at closing. The transaction included the operations of Volt Directory Systems and DataNational, formerly part of the Telephone Directory segment, but excluded the Uruguayan printing and telephone directory operations, which now comprises this new segment. The results of operations of Volt Directory Systems and DataNational have been classified as discontinued and the prior period results have been reclassified. The Printing and Other segment's sales increased by $4.1 million from the 2007 fiscal year, and its operating profit increased by $0.1 million in fiscal 2008, despite a decrease in the gross margin percentage.

The Company has focused, and will continue to focus, on aggressively increasing its market share while attempting to maintain margins in order to increase profits. Despite an increase in costs to solidify and expand their presence in their respective markets, the segments have emphasized cost containment measures, along with improved credit and collections procedures designed to improve the Company's cash flow.

Consolidated Results of Operations

The information that appears below relates to prior periods. The results of operations for those periods are not necessarily indicative of the results which may be expected for any subsequent period. The following discussion should be read in conjunction with the Operating Segment Data in Item 1 of this Report and the Consolidated Financial Statements and Notes thereto which appear in Item 8 of this Report.

In fiscal 2008, consolidated net sales increased by $142.3 million, or 6%, to approximately $2.4 billion, from the prior fiscal year. The increase in the sales for the fiscal year was comprised of increases in Staffing Services of $72.9 million, Telecommunications Services of $52.0 million, Computer Systems of $13.4 million, and Printing and Other of $4.1 million.

Cost of sales increased by $182.0 million, or 9%, to $2.3 billion, and was 94% of sales, in fiscal 2008, as compared to 92% of sales in fiscal 2007. The increase in the cost of sales percentage was primarily due to the losses sustained in the Telecommunications segment in fiscal 2008.

Selling and administrative costs increased by $2.3 million, or 3%, in fiscal 2008 from fiscal 2007, and was 3.8% of sales, as compared to 3.9% in fiscal 2007.

Depreciation and amortization increased by $1.5 million, or 4%, in fiscal 2008 from fiscal 2007, and remained at 1.6% of sales. The increase in depreciation and amortization in the current year compared to fiscal 2007 was attributable to increases in amortization of intangibles in the Computer Systems segment due to acquisitions in fiscal 2007, along with additions of fixed assets in the Computer Systems, Staffing Services and the Telecommunications Services segments, partially offset by a reduction in amortization of the corporate enterprise resource planning system.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--Continued

FISCAL 2008 (53 WEEKS) COMPARED TO FISCAL 2007 (52 WEEKS)

Consolidated Results of Operations--Continued

Impairment and restructuring charges totaled $47.9 million in fiscal 2008. Based upon indicators of impairment in the fourth quarter of fiscal 2008, which included a significant decrease in market capitalization, a decline in recent operating results, and a decline in the Company's business outlook primarily due to the macroeconomic environment, the Company performed an interim impairment test as of November 2, 2008. The Company completed step one of the impairment analysis and concluded that, as of November 2, 2008, the fair value of the Computer Systems and Staffing Services segments were below their respective carrying values including goodwill. Step two of the impairment test was initiated but, due to the time consuming nature, has not been completed. The Company recorded estimates of impairment in the amount of $41.5 million and $4.9 million, in the Computer Systems and Staffing Services segments, respectively as of November 2, 2008. The Company expects to complete the step two analyses in time for the first quarter Form 10-Q filing. The Company recorded no impairment charges in fiscal 2007 or 2006. The restructuring charge of $1.5 million in the Computer Systems segment was due to the reduction of foreign and domestic personnel as a result of the acquisition and integration of LSSi.

The Company reported an operating loss of $40.7 million in the current year, as compared to an operating profit of $50.7 million in fiscal 2007 due to a decrease in segment operating profit of $95.0 million, or 105%, partially offset by a decrease of $3.6 million, or 9%, in general corporate expenses. The decrease in segment operating results, after taking into the effect the write-down of goodwill, was primarily attributable to the decreased operating results of the Computer Systems segment of $54.4 million, the Telecommunications Services segment of $27.6 million and the Staffing Services segment of $13.1 million.

Interest income decreased by $1.4 million, or 23%, in the current year from fiscal 2007 due to lower interest rates and a reduction in premium deposits held by insurance companies.

Other expense decreased by $3.1 million, or 44%, in the current year from fiscal 2007 due to an amended securitization program which resulted in a reduction in securitization fees and an increase in interest expense.

Interest expense increased by $4.0 million, or 111%, in the current year from fiscal 2007 due to additional borrowings used to fund the 2007 acquisitions and the aforementioned amended securitization program.

The income from continuing operations before income taxes decreased by $92.1 million, or 201%, from fiscal 2007 due to the aforementioned factors.

The Company's effective tax benefit on its financial reporting pre-tax loss from continuing operations was 25.7% in fiscal 2008 compared to an effective tax provision rate of 35.5% on its financial reporting pre-tax income in fiscal 2007.

Income from discontinued operations for fiscal 2008 totaled $98.5 million (net of income taxes of $67.1 million) compared to $9.8 million (net of income taxes of $6.7 million) in fiscal 2007. The increase was due to the gain on the sale of the discontinued operation in fiscal 2008.

The net income in fiscal 2008 was $64.2 million compared to a net income of $39.3 million in fiscal 2007.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS--Continued

FISCAL 2008 (53 WEEKS) COMPARED TO FISCAL 2007 (52 WEEKS)--Continued

Results of Operations by Segment
--------------------------------

The  following  two  tables  reconcile  the  operating  profit by segment to the
consolidated statements of operations for the fiscal year ended November 2, 2008
and October 28, 2007:

                                                      Twelve Months Ended November 2, 2008
                                                      ------------------------------------
                                                               (Dollars in Millions)
                                                      Staffing  Telecommunications  Computer    Printing    Corporate &
                                        Total         Services      Services        Systems     and Other   Eliminations
                                     ----------      ----------     --------       --------      -------     -------
Net sales                            $  2,427.3      $  2,043.8     $  171.7       $  212.7      $  16.9     ($ 17.8)

Direct costs                            1,930.5         1,707.1        133.3           96.9         11.0       (17.8)
Overhead                                  359.7           234.1         57.9           67.7           --          --
                                     ----------      ----------     --------       --------      -------     -------
Cost of sales                           2,290.2         1,941.2        191.2          164.6         11.0       (17.8)

Selling & administrative                   91.3            43.2          0.5            8.9          4.9        33.8
Impairment  and restructuring
    costs                                  47.9             4.9           --           43.0           --          --
Depreciation                               38.6            14.0          2.6           18.9          0.7         2.4
                                     ----------      ----------     --------       --------      -------     -------

Operating (loss) profit                   (40.7)           40.5        (22.6)         (22.7)         0.3       (36.2)
Interest income                             4.8              --           --             --           --         4.8
Other expense, net                         (4.0)             --           --             --           --        (4.0)
Foreign exchange                            1.2              --           --             --           --         1.2
Interest expense                           (7.6)             --           --             --           --        (7.6)
                                     ----------      ----------     --------       --------      -------     -------
(Loss) income from continuing
    operations before minority
    interest and income taxes        ($    46.3)     $     40.5     ($  22.6)      ($  22.7)     $   0.3     ($ 41.8)
                                     ==========      ==========     ========       ========      =======     =======

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS--Continued

FISCAL 2008 (53 WEEKS) COMPARED TO FISCAL 2007 (52 WEEKS)--Continued

Results of Operations by Segment--Continued
--------------------------------

                                                       Twelve Months Ended October 28, 2007
                                                       ------------------------------------
                                                              (Dollars in Millions)
                                                      Staffing  Telecommunications Computer    Printing   Corporate &
                                       Total          Services      Services       Systems     and Other  Eliminations
                                     ----------      ----------     --------       --------     -------     -------
Net sales                            $  2,285.0      $  1,970.9     $  119.7       $  199.3     $  12.8     ($ 17.7)

Direct costs                            1,810.3         1,641.0         88.6           90.8         7.6       (17.7)
Overhead                                  297.9           221.2         23.8           52.9          --          --
                                     ----------      ----------     --------       --------     -------     -------
Cost of sales                           2,108.2         1,862.2        112.4          143.7         7.6       (17.7)

Selling & administrative                   89.0            42.4          0.4            7.6         4.2        34.4
Depreciation                               37.1            12.7          1.9           16.3         0.8         5.4
                                     ----------      ----------     --------       --------     -------     -------

Operating profit (loss)                    50.7            53.6          5.0           31.7         0.2       (39.8)
Interest income                             6.2              --           --             --          --         6.2
Other expense, net                         (7.1)             --           --             --          --        (7.1)
Foreign exchange                           (0.4)             --           --             --          --        (0.4)
Interest expense                           (3.6)             --           --             --          --        (3.6)
                                     ----------      ----------     --------       --------     -------     -------
Income (loss) from continuing
    operations before minority
    interest and income taxes        $     45.8      $     53.6     $    5.0       $   31.7     $   0.2     ($ 44.7)
                                     ==========      ==========     ========       ========     =======     =======

Staffing Services
-----------------

                                                              Year Ended
                                                              ----------
                                              November 2, 2008          October 28, 2007
                                              ----------------          ----------------
                                                           % of                       % of        Favorable           Favorable
                                                            Net                        Net     (Unfavorable) $      (Unfavorable)
(Dollars in Millions)                      Dollars         Sales       Dollars        Sales         Change           % Change
. . .