LogicaCMG is axing 1,300 European jobs as part of a £110 million restructuring plan, that will see the company hire more staff in India and increase its consulting workforce.
Some 500 UK employees will be made redundant as part of the scheme. The restructure is the result of a business review begun by chief executive Andy Green when he joined the company in January.
The restructure is expected to deliver cost savings of approximately £80 million per year from 2010. The IT services firm will increase investment in outsourcing and more than double its ranks from 3,450 to 8,000 employees in nearshore and offshore centres by the end of 2009. It will also grow its consultant team from 2,500 to 3,500 by 2010.
The IT services group will expand its blended delivery model – a mix of local presence with offshore resources - to prepare for anticipated demand from its European customers. The firm said it would spend about £10 million in this area, and would open a new site in Chennai, India by the fourth quarter of 2008.
Logica's UK operations struggled with poor performance throughout 2007. In August, the company cited “weakness in the commercial sectors” when it announced a drop in revenues. Half of the decline in UK revenues was due to a £13.6m write-off on a project cost over-run with a transport firm – understood to be with Transport for London.
Recent UK customer wins include work with construction company Taylor Wimpey and an applications management contract at British Airports Authority