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 Part I of this Form 10-Q 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 Forward-Looking Statements - This section describes some of the language and assumptions used in this document that may have an impact on the readers' interpretation of the financial statements.

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 Consolidated Results of Operations - This section provides an analysis of the line items on the Statements of Operations for the current and comparative accounting periods.

o Results of Operations by Segment - This section provides a summary of the results of operations by segment in tabular format and an analysis of the line items by segment for the current and comparative accounting periods.

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

o Critical Accounting Policies - This section discusses those accounting policies that are both considered to be 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 an executive officer has more than a 10% equity ownership interest, as well as members of the immediate families of any of the foregoing persons, during the first six months of fiscal year 2008 and 2009. Excluded from the transactions are employment compensation and directors' fees.

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

Forward-Looking Statements

This report and other reports and statements issued by the Company and its officers from time to time contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact could be deemed forward-looking statements, including but not limited to projections of revenue, margins, expenses, tax provisions, earnings, cash flows or other financial items; statements of plans, strategies and objectives of management for future operations, including the execution or results of cost reduction programs and restructurings; statements concerning utilization of our services by customers or our ability to renew contracts with customers; statements regarding future economic conditions or performance; statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," or variations thereof or similar or comparable words or phrases. Forward-looking statements involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of the Company may differ materially from those expressed or implied by such forward-looking statements and assumptions. Risks, uncertainties and assumptions include general economic, competitive and other business conditions, the degree and timing of customer utilization of the Company's services, the rate of renewals of contracts with the Company, potential employment- and customer-related liability, new and expanded government regulations, continued access to qualified employees, continued compliance with loan agreements and the other risks that are described herein and that are otherwise described from time to time in the Company's Securities and Exchange Commission reports, including the Company's Annual Report on Form 10-K for the fiscal year ended November 2, 2008. The Company assumes no obligation and does not intend to update these forward-looking statements.

The information, which appears below, relates to current and prior periods, the results of operations for which periods are not indicative of the results which may be expected for any subsequent periods.

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 this management discussion and analysis addresses each segment. A brief description of these segments and the predominant source of their sales follows:

Staffing Services: During the second quarter of fiscal 2009, the Company consolidated the operations of Volt Technical Resources ("VTR division") and Volt Services Group ("VSG division") to reduce redundancies and achieve efficiencies in response to the decrease in Staffing Services revenue and ongoing economic uncertainty. These changes include, but are not limited to, office consolidations and the realignment of in-house staff. In some geographical markets, VTR and VSG will continue to operate separately, while in some markets they will operate full-service offices under the brand of Volt Workforce Solutions ("VWS"). As a result of these changes, including office consolidations and closures, the segment recorded a restructuring charge of $6.7 million in the first six months of fiscal 2009.

This segment is now divided into two major functional areas and operates through a network of over 200 branch offices.

o Staffing Solutions provides a full spectrum of managed staffing, temporary/contract personnel employment, and workforce solutions. 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 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. Staffing Solutions provides skilled employees, such as computer and other IT specialties, engineering, design, life sciences and technical support (which were formerly part of the VTR division ("Technical")), as well as administrative, clerical, office automation, accounting and financial, call center and light industrial personnel (which were formerly part of the Administrative and Industrial, or VSG division ("A&I")). The length of an employee's assignments may be as short as a few weeks but in many cases can last for six to twelve months.

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

Executive Overview--Continued

o Technology and Consulting is comprised of the Procurestaff and VMC Consulting operations. Procurestaff 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 employees and 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. Prior to the Staffing Services consolidation, Procurestaff was part of the Technical division. VMC Consulting 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. VMC Consulting offers higher margin project-oriented services to its customers and assumes greater responsibility and risk in contrast to the other areas within the segment. Prior to the Staffing Services consolidation, VMC Consulting was part of the Technical division.

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 third quarter of fiscal 2008. In September 2008, the Company sold the net assets of its DataNational and Directory Systems divisions, whose operations for the prior fiscal periods have been reclassified to Discontinued Operations in these financial statements, with the remainder of the segment being renamed Printing and Other.

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 Securities Exchange Commission ("SEC") rules. Some of these measures are as follows:

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

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

Executive Overview--Continued

Segment operating profit is comprised of segment 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 operating profit (loss) should only be used on a supplemental basis combined with GAAP results when evaluating the Company's performance.

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 costs incurred in the operations of 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.

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.

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 which has continued into the second quarter of fiscal 2009 has adversely affected the Company's revenue and operating profit.

In the six and three month periods of fiscal 2009, the Company's consolidated net sales totaled $946.8 million and $447.1 million, respectively, and the consolidated segment operating loss totaled $10.5 million and $2.1 million, respectively. The explanations by segment for the six and three month periods of fiscal 2009 are detailed below.

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

Executive Overview-Continued

Staffing Services: The Staffing Services segment's net sales for the six and three-month periods of fiscal 2009 decreased by $178.6 million and $121.8 million, respectively, from the comparable fiscal periods of 2008. The operating results for the current six and three-month periods decreased by $23.3 million and $7.2 million, respectively, from the comparable fiscal 2008 periods. The decrease in operating results in the six months and current quarter from the comparable fiscal 2008 periods was primarily due to impairment and restructuring charges of $12.7 million and $4.5 million, respectively, and the sales decrease.

Telecommunications Services: The Telecommunications Services segment's sales decreased by $52.0 million and $29.2 million from the respective six and three-month periods of fiscal 2008; however, the operating results improved by $17.4 million from the six-month period and decreased $1.8 million from the three-month period. The improved operating results for the six-month period of fiscal 2009 were due to the absence of a $19.3 million reserve taken in the first quarter of fiscal 2008 for certain costs included in inventory related to work performed and for additional costs expected to be incurred to complete work under an installation contract. The installation work on this contract is complete. The Company continues to negotiate with the customer in order for it to be reimbursed for disputed billings under this contract. The decreased operating results for the current quarter were primarily due to the decrease in sales.

Computer Systems: The Computer Systems segment's sales decreased by $10.0 million and $7.7 million respectively, from the six and three-month periods of fiscal 2008, while its operating profit decreased by $7.2 million and $6.3 million, in the six and three-month periods of fiscal 2009. The decrease in operating results in the six and three month periods of fiscal 2009 was primarily due to the sales decreases.

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 comprise this new segment. The results of operations of Volt Directory Systems and DataNational have been reclassified as discontinued operations in the prior period. The Printing and Other segment's sales increased by $0.4 million and decreased by $0.2 million from the six and three-month periods of fiscal 2008, and its operating profit increased by $0.5 million and $0.2 million in the six and three-month periods of fiscal 2009, respectively.

The Company has implemented a series of cost cutting initiatives, including branch closings and staff reductions, designed to improve performance. 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.

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

SIX MONTHS ENDED MAY 3, 2009 COMPARED
TO THE SIX MONTHS ENDED APRIL 27, 2008

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 Consolidated Financial Statements and Notes thereto which appear in Item 1 of this Report.

Consolidated Results of Operations

In the first six months of fiscal 2009, consolidated net sales decreased by $239.3 million, or 20%, to approximately $946.8 million, from the comparable period of fiscal 2008. The decrease in the six months' net sales resulted primarily from decreases in Staffing Services of $178.6 million, Telecommunications Services of $52.0 million and Computer Systems of $10.0 million.

Cost of sales decreased by $236.8 million, or 21%, to $898.5 million, and was 95% of sales, in the six months of fiscal 2009 as compared to 96% of sales in the comparable period of fiscal 2008. The decrease in the cost of sales percentage was primarily due to the absence of $19.3 million loss reserve established in the first quarter of fiscal 2008 in the Telecommunication Services segment.

Selling and administrative costs decreased by $1.8 million, or 4%, in the current six-month period from the comparable period in fiscal 2008, and was 4.6% of sales, as compared to 3.8% of sales in the comparable period of fiscal 2008.

Impairment and restructuring charges totaled $14.4 million in fiscal 2009. 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 values 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, had not been completed as of the time of the filing of the Company's Annual Report. 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. During the first quarter of fiscal 2009, the Company completed the step two analyses and recorded an additional impairment in the amount of $6.0 million in the Staffing Services segment. During the second quarter of fiscal 2009, the Company recorded an impairment charge in its Computer Systems segment based on its annual testing of goodwill and intangible assets of $1.2 million. In addition, in the six months of fiscal 2009, as a result of declines in revenue, profits and the ongoing economic uncertainty, the Company recorded a pre-tax restructuring charge of approximately $7.2 million related to the elimination of employee positions in the Staffing Services and Computer Systems segments and the closing of 55 facilities in the Staffing Services segment. In the first quarter of fiscal 2008, a restructuring charge of $1.5 million in the Computer Systems segment was recorded due to the reduction of foreign and domestic personnel as a result of the acquisition and integration of LSSi.

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

SIX MONTHS ENDED MAY 3, 2009 COMPARED
TO THE SIX MONTHS ENDED APRIL 27, 2008--Continued

Consolidated Results of Operations -- Continued

Depreciation and amortization decreased by $0.7 million, or 4%, in the current six-month period from the comparable period in fiscal 2008, and was 2.0% of sales, as compared to 1.6% of sales in the comparable period of fiscal 2008. The decrease in depreciation and amortization in the current six months from the comparable 2008 fiscal period was attributable to assets becoming fully depreciated during fiscal 2008.

The Company reported an operating loss of $28.3 million in the current six months, as compared to $15.4 million in the comparable period of fiscal 2008. This decrease was due to the segments reporting an operating loss of $10.5 million compared to an operating profit of $2.1 million and an increase of $0.3 million, or 1%, in general corporate expenses. The increase in segment operating losses was attributable to the decreased operating results of the Staffing Services segment of $23.3 million and the Computer Systems segment of $7.2 million, partially offset by increased operating results of the Telecommunications Services segment of $17.4 million and the Printing and Other segment of $0.5 million.

Interest income decreased by $1.7 million, or 64%, in the current six months from the comparable period in fiscal 2008, primarily due to lower interest rates.

Other expense decreased by $2.0 million, or 69%, in the current six months from the comparable period in fiscal 2008 due to an amended securitization program which resulted in a reduction in securitization fees and an increase in interest expense.

Interest expense decreased by $0.7 million as a result of lower interest rates and a reduction in borrowings under the Delta Credit Facility, partially offset by the aforementioned amended securitization program.

The loss from continuing operations before income taxes for the six months of fiscal 2009 totaled $30.4 million compared to a loss from continuing operations of $19.4 million in the comparable six months of fiscal 2008.

The Company's effective tax benefit rate on its financial reporting pre-tax loss was 28.4% in the six months of fiscal 2009 compared to 36.2% in the comparable period in fiscal 2008. The Company's fiscal 2009 effective tax benefit for the three months ended was impacted by foreign tax cumulative losses requiring a valuation allowance and for the six months ended also included the impact of the non-deductible portion of goodwill impairment. The Company's 2008 effective tax provision was primarily impacted by discontinued operations, foreign operations and the adoption of FIN 48.

Discontinued operations totaled $2.5 million (net of income taxes of $1.7 million) in the six months of fiscal 2008.

The net loss in the six months of fiscal 2009 was $21.7 million compared to a net loss of $9.8 million in the comparable period of fiscal 2008.

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

SIX MONTHS ENDED MAY 3, 2009 COMPARED
TO THE SIX MONTHS ENDED APRIL 27, 2008--Continued

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

The following two tables reconcile the operating (loss) profit by segment to the
consolidated statements of operations for the six months ended May 3, 2009 and
April 27, 2008:

                                                       Six Months Ended May 3, 2009
                                                       ----------------------------
                                                          (Dollars in Millions)
                                                   Staffing       Telecommunications     Computer      Printing       Corporate &
                                      Total        Services            Services           Systems      and Other      Eliminations
                                      -----        --------            --------           -------      ---------      ------------
Net Sales                            $946.8          $808.9             $44.4                $92.9          $8.0         ($7.4)

Direct Costs                          757.6           685.3              30.8                 42.7           6.2          (7.4)
Overhead                              140.9            96.7              12.2                 32.0             -             -
. . .