Logica slashes over 1,300 jobs

Jennifer Scott News
14 Dec, 2011

The services firm swings the axe as the eurozone crisis hits the IT industry.

Logica today confirmed it would be cutting “in excess of” 1,300 jobs, blaming the eurozone crisis for its loss of trade.

The roles set for the chop have not been revealed, but they will come from across their offices in the UK, Sweden and the Benelux countries.

“We deeply regret the impact job losses will have on the people affected in many of our businesses,” said Andy Green, chief executive (CEO) of Logica.

“But we are confident that it is best for our clients, people and shareholders that we face squarely into the difficult economic conditions ahead.”

Although the company’s long term contracts have stayed in place, it claimed short term ones had declined as customers looked to hold off investing during the rocky economic times across Europe.

This has led to Logica’s revenue growth for the year fall from five per cent to three per cent and has pushed the firm to expedite its plans for restructuring, getting it all done straight away rather then over the next two years as originally planned.

This won’t solve all its problems as redundancies, properties and other charges as a result of the restructure will mount up to £93 million. On top of this, Logica will face a one off charge of £39 million for failing to deliver on “a small number” of long term contracts.

However, it will allow between £25 and £35 million to be pumped into the company this year, with a further £50 to £60 million to come in during 2012.

Once the measures have been enforced, Logica claims its Benelux businesses will be back in profit next year and Sweden will at least increase its margins.

“This decisive action will result in sustainable margin improvement in 2012, with the benefits starting to flow through in the second half,” added Green.

“It will also ensure that a strong Logica can concentrate on helping clients to use technology to cut costs and serve their customers better.”

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