Logica is slashing around 700 UK jobs following its acquisition by Canadian firm CGI earlier this summer.
Logica began a two-year restructuring programme last December in response to poor market conditions and company results. Some 1,300 jobs were targeted across the company’s international operations, with 450 of them set to be axed in the UK.
Now, less than a month after the Logica purchase was completed, it is being reported that CGI is cutting 700 jobs at Logica in the UK covering corporate and back office functions, including technical staff and project managers, to help slash running costs.
It is not clear whether these 700 job losses are in addition to or include the the 450 announced last December. The 700 jobs to go represent around 10 percent of the current Logica UK headcount.
Richard Holway, founder of analyst firm TechMarketView, said, "Logica and CGI in Europe make margins around half of those CGI makes outside of Europe. So, in some respects, it is hardly surprising that costs will be cut."
He added, "On the other hand, this is yet another in a long list of examples of what happens when UK companies are taken over by those HQed outside the UK. The hidden costs to the UK economy are huge and rarely exposed."
As well as immediate jobs losses, said Holway, the cost to the UK economy is usually less entry level/graduate staff being taken on in the UK and less corporate taxes being paid in the UK.
Tim Gregory, the new UK president of CGI, faced a "number of challenges" warned TechMarketView last month.