Fujitsu will keep Kaz headcount

Fujitsu will keep Kaz headcount

Summary: Fujitsu Australia chief executive Rod Vawdrey today said the acquisition of Telstra's Kaz Group would not result in redundancies, however, the fate of senior management is yet to be decided.


Fujitsu Australia chief Rod Vawdrey (Credit: Fujitsu)

Fujitsu Australia chief executive Rod Vawdrey today said the acquisition of Telstra's Kaz Group would not result in redundancies, however, the fate of senior management is yet to be decided.

The proposed $200 million acquisition of Kaz will add some 1,400 to Fujitsu Australia's current headcount of 3,500, Vawdrey told this morning, bringing its local workforce close to 5,000.

The combined annual revenues expected as a result of the acquisition would be around $1.1 billion to $1.2 billion, he said. Fujitsu Australia's revenues last year were around $800 million, according to Vawdrey.

Key clients Fujitsu stands to inherit from Kaz include the sometimes troubled $200 million desktop support deal with the Department of Defence, Australia Post and petroleum giant BP.

Between 2007 and 2008, Kaz had also provided Centrelink with IT contractors and Microsoft software licensing; however, the value of the work at less than $1 million was substantially less than the $22 million it earned from Centrelink between 2005 and 2006.

Other clients it will inherit include ING Australia, which in 2010 will hit the end of a five-year infrastructure management deal, and a five-year deal with Royal Australian Navy due to expire in 2011.

The buy significantly changes Fujitsu's client profile, with the Japanese-owned company previously having a limited presence in the Federal Government. Fujitsu's customers have traditionally been from the corporate sector and state government agencies, such as the services contract it holds with the NSW Roads and Traffic Authority and project work it has done with the Western Australian Police.

"The acquisition will give us tremendous coverage in the market and strengthen some areas that we weren't as strong as we'd like to be," said Vawdrey.

Redundancies were not expected to result from the deal, said Vawdrey, though the fate of senior management has yet to be decided. "There are no plans to reduce staffing levels. We're buying customers and people essentially," he said. "The senior management team at Kaz Group will be working closely with Fujitsu over coming months to ensure a smooth integration of the two businesses."

Vawdrey said a key part of the transaction with Telstra was that Fujitsu would retain a "key strategic alliance" with the telco to partner with it on future IT services deals.

Telstra has remained relatively quiet on the sale. The telco had acquired Kaz in 2004 for $333 million, and in 2007 had sold its business process outsourcing division to Fuji Xerox for an undisclosed sum, which involved the transfer of just 120 Kaz staff.

After a long-running attempt to flog Kaz's remaining assets, with CSC and Fujistu Australia the likely buyers, Telstra last year took it off the market.

Today's transaction, in conjunction with the 2006 sale of Kaz's superannuation business, Australian Administration Services, for $215 million, means Telstra has sold Kaz for more than it bought the company for.

"The sale of Kaz provides Telstra with an attractive return for a business where its ownership was no longer considered a core part of TE&G's strategy," a Telstra spokesperson said.

"An essential component of this acquisition is the people and their skills. Mike Foster will assist with Fujitsu during the transition period and we will look at the future in due course. No firm plans have been developed to date," they added.

Topics: Telcos, Government, Government AU, Outsourcing, Telstra, Tech Industry

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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    I wonder whether Fujitsu has paid for a presence? What is in Kaz?

    Just sitting on the perimeter thinking,
    for some reason Zwitkowski paid $300m for nuttin....and Fujitsu might have gotten a discounted nuttin' at $200m.....but in these times it would be overpriced at $75m??

    Then again, Fujitsu would know its history and would know their latest doings, and not I.

    Someone please set me right.

    Innocent and distant observer.
  • Fujitsu acquisition

    There is a process called due diligence. I suppose Fujitsu would have done due diligence and seen some value in purchasing it.
    Japanese companies are normally very conservative in their approach.

    Fujitsu also wants to open up their access to other clients where KAZ has a presence and Fujitsu does not.

    Sometimes smart companies can turn a loss making company into profit making company.
  • Rod Vawdrey = Not to be trusted,

    Rod Vawdrey today said the acquisition of Telstra's Kaz Group would not result in redundancies

    Well -- that is not true. Fujitsu have been taking the axe and retrenching technical and team lead staff. Just thought everyone should know the facts.
  • Followed up

    We called Fujtsu and asked if there had been any redundancies. The company denies emphatically that there have been any. The PR informs me that Fujitsu is hiring.
  • Follow Up

    Well the company is simply lying. The truth is the opposite. PR may inform you that Fujitsu is hiring but what they are not telling you is they axed much required technical staff on one of the new accounts they picked up. Shame on you.
  • KAZ lies

    Yep, I know of at least 3 staff in Kent Street that were made redundant last year. Two without any notice at all. Just called into the office and told their jobs don't exist any more.
    Nice to see the media do their research by calling companies and beliving the BS they are told.