eServGlobal drops 13% of staff

Australian telco software specialist eServGlobal today said that by June it will have shorn its headcount by 13 per cent in comparison to December 2008 levels.

The move was an expansion of its restructuring program from the original intention of moving headcount to low-cost locations in Romania and India. The program had been instigated with the aim of increasing the company's earning margins.

Executive chairman of the company, Ian Buddery, said that around 100 people will have been made redundant by the end of June this year, bringing the company's numbers to around 650, spread over 16 offices around the globe.

Buddery said that the company had let a handful of contractors go from its Australian operations in the beginning of the year, but there were no further reductions planned for the country. Most of the reductions had occurred in Europe where the costs of hiring people was high and the platforms were less strategic for the future of the business, he said.

The employee reduction was expected to save $10 million a year, according to the company, balancing $6 million in restructuring costs. The company has been rationalising platforms to a single architecture, Buddery said, which required less software engineers.

"The restructuring and rationalisation of product platforms in FY09 will enable us to generate more revenue from a reduced cost base in coming years, whilst reducing the cost of implementation and support," Buddery said.

The company also announced today that it, together with global relationship management company Convergys, had won two major contracts for the provision of real-time convergent charging and billing. One win was with a leading mobile operator in the US while the other was with a fixed line operator in Indonesia. The value of the deals was not disclosed.