Logica job cuts confirmed

As expected, even the darling of the UK's IT sector has been forced to cut staff numbers

Logica has confirmed rumours that it is looking to make reductions in its headcount, but insisted that the US terrorist attacks have not affected its business.

In a statement made at the company's annual general meeting, non-executive chairman Sir Frank Barlow announced that Logica would cut between 4 to 5 percent of staff in the coming months. It's not yet clear where the cuts will be made, but Barlow has warned that Logica's telecoms solutions business has been hit by the slump in the mobile sector. Globally, Logica employs around 12,000 people.

Barlow insisted that the graduate recruitment programme would be largely unaffected by the move.

Some IT companies have found that the terrorist attacks of 11 September have had a serious negative impact on their businesses, but Logica insists it has been unaffected. "We have not seen any significant adverse impact in our business from the events of September 11 as these have served to highlight rather than cause the industrial world's economic slowdown," said Barlow.

Credit Suisse First Boston (CSFB) has already predicted that job cuts were coming at Logica. In a research note, CSFB forecast that 240 employees in Logica's mobile network division would be made redundant. Monday's Irish Independent predicted that Logica was planning to lay off 15 percent of its Irish workforce.

Despite the cuts, Barlow made upbeat noises about Logica's prospects for 2002. "As we look forward, our order intake, current prospect pipeline and strong operational controls give the board confidence that we are on track to deliver strong financial performance as outlined in our preliminary announcement," he said.

Sources close to the company have told ZDNet UK that Logica recently offered a voluntary redundancy package to employees -- but few staff showed much interest in the offer. Barlow admitted that staff attrition rates have recently declined.

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