Logica To Axe 1,300 Jobs Due To European Crisis
Logica announces it will axe 1,300 positions, including 450 in the UK and Sweden
Anglo Dutch IT Services giant Logica has revealed it is to axe 1,300 jobs, or 3.2 percent of its workforce of 41,000 people. Logica said it is accelerating its restructuring programme in order to leave it in a better position to deal with the current challenging times.
The IT services provider made it clear that the job cutting is a direct result of the current financial crisis racking the Eurozone countries, as they seek a way to resolve the unsustainable debt burdens engulfing many of the key European economies. This in turn means that many of Logica’s customers are slashing their spending.
Reading-based Logica said that while its order book for long-term contracts remains strong, many of its clients are delaying their short term expenditure and reducing their “discretionary investments.”
This is having a financial impact on the company, and as a result “the pockets of weakness that we first saw in September have widened through the quarter,” the company said. “We now expect full year revenue growth to be around three percent, and underlying profitability in the range of £240m to £250 million (net of £25 million of previously announced restructuring charges).”
It also pointed to recent market forecasts that now predict GDP declines of 1 percent to 2 percent in our European markets in 2012.
“We are therefore accelerating the restructuring that we would otherwise have spread over the next two years,” the company said. “We expect these measures to impact in excess of 1,300 jobs.”
So where exactly is the headcount axe going to fall?
Well it seems that in the Netherlands and Belgium between 450 and 550 people will be handed their pink slips. Another 450 people are to handed their marching orders in both the UK and Sweden, and the company added that a further 200 jobs are expected to go in Sweden as its realigns the business in that market.
“We are confident that taking tough decisions today will deliver the stability that our clients, the rest of our people and our shareholders need in difficult times and will build a more sustainable business for the future,” the company said in a statement.
“We deeply regret the impact job losses will have on the people affected in many of our businesses,” said CEO Andy Green. “But we are confident that it is best for our clients, people and shareholders that we face squarely into the difficult economic conditions ahead.”
“This decisive action will result in sustainable margin improvement in 2012, with the benefits starting to flow through in the second half,” Green added. “It will also ensure that a strong Logica can concentrate on helping clients to use technology to cut costs and serve their customers better.”