LogicaCMG to cut more jobs amid trading downturn
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Newly merged LogicaCMG is to cut 2,200 jobs - 9.5% of the new company's workforce - in response to a slide in revenues and profits in 2002.
6 March 2003 Newly merged LogicaCMG is to cut 2,200 jobs - 9.5% of the new company's workforce - in response to a slide in revenues and pre-tax profits in the second half of 2002.
The company had already announced plans to slash 1,440 jobs or 6% of the total in a bid to generate savings of about £60 million. But CEO Martin Read said that a better understanding of the merged company's business has enabled him to identify more cost savings that can be made.
The announcement was made as LogicaCMG unveiled interim figures for the six months to the end of December. For the second half of 2002, the company reported revenues of £882.5 million, down by 17% compared to the same period a year earlier, while pre-tax profits weighed in at £54.5 million, before exceptional items.
These include a write-down of £444.6 million, largely related to CMG's May 2000 acquisition of rival Admiral, which it acquired at the crest of the technology stock boom for £1.04 billion. After exceptional items, LogicaCMG recorded a net loss of £458.3 million.
Logica's merger with CMG was completed at the end of December and Logica's highly-regarded management team is now in full control following the departure of former CMG CEO Alistair Crawford.
During the announcement, finance director Seamus Keating also warned that trading remained difficult. The French and German markets are particularly difficult, he said, and while prices have stopped falling, demand for consulting and systems integration remains weak.
