Aussie IT services firm SMS Technology and Management today revealed it had shed 167 staff between June 2008 and the end of the calendar year.
SMS CEO Tom Stianos
(Credit: SMS M & T)
The heftiest cuts were made to the company's contractor roles. Of the 438 contractors employed at SMS in June, just 321 remain, representing a cut of 117 contractors.
Meanwhile, 50 permanent consultants were shed over the period, meaning that 735 out of 785 permanent staff that were employed in June remained today. The cuts in total represent around 12 per cent of the company's 1,401-strong June workforce.
SMS chief executive Tom Stianos had insisted until today's first half-year earnings that the company had not cut its headcount; however, he said in October SMS would take a more "cautious approach" to hiring in the coming year.
The company joined its fellow ASX-listed peer Oakton, which this morning revealed that over the past six months it had shed 90 from its headcount. The redundancies resulted in a one-off cost of $1.2 million for Oakton, further damaging its first half financial results.
However, it wasn't all bad news for SMS today. The company also said it had no debt, and its revenues were up $8 million to $120 million for the half year, compared with $112 million over the corresponding period last year. Another high point for the company was its cash balance which had increased from $16 million in June 2008 to $20 million by December 2008.
Stianos today said that while the company's previous five-year strategy (to 2010) had seen its earnings before interest, tax, depreciation and amortisation (EBITDA) triple from $10 million to $35.1 million for the 2008 financial year, its next five-year plan would focus on protecting its $20 million cash position.
"We have updated our five-year plan (previously covering 2005-2010) to take account of the changed market conditions," he said.
The company is hoping to reduce its fixed costs, defer aggressive growth target investments and is aiming to reduce its operating costs by $5 million during the third quarter, it told investors.