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Logica sees logic in largescale job loses

When a multi-billion dollar organisation wants to update its systems and see how it could be doing business better, then Dutch-Brit tech specialist Logica, might have been one of their first phone calls. Now it seems that Logica’s high-powered analytical skills have been focused inwards. Result? Major job loses. KitGuru knocks out a Jackson’s Structured Programming diagram and considers the implications.

Roll the clock back to the 80s and 90s, and any self-respecting computer science graduate would have put Logica on their short list of ‘cool places to work’. While it might not have been as bulky, overall, as companies like Andersons, Logica seemed to be more technical. For geeks, very few things are more appealing than the ‘more technical option’.

Recruitment consultancies in the Reading area could be receiving up to 300 CVs, while similar numbers will be handed boxes and asked not to return in Sweden, Belgium and Holland.

The 40-odd-thousand Logica bods left can probably breathe easy for a long time. The axing of over 1,000 people at the end of 2011, was actually scheduled to happen sometime in 2013. So unless HQ decides that more leeches and blood-letting are required, you’d imagine most of the 40k will see at least 2 more happy Christmas’ before anything bad happens.

So where did Logica’s loses come from ?

Well, operating profit for the whole of 2011 could be down by as much as £20 million. While $2 Billion of its overall revenue comes from consulting [Borrowing someone’s watch, telling them the time and then charging them for the privilege – Ed], there had been another $1.7 Billion flowing in from pure technology (hardware and the like).

With clients deciding, overall, that they can tell the time themselves – Logica is also being hit by the overall plummeting cost of technology. Simply put, in the present economic downturn, stuff has to cost less and customers expect it to last longer.

Shot of grinning Andy Green when he was declaring the world rosy, near the start of 2009. Landsbanki analyst Michael Donnelly noted "We are pleased..." while a certain George O'Connor from Panmure Gordon called the situation correctly when he said Green had not done enough with his new plans to secure Logica's future.

KitGuru says: Given that Logica’s CEO, Andy Green, told the markets at the end of 2008, “I am confident that my plan will allow us to outperform the market and revitalise Logica. We have set out an exciting programme for growth”, will we see shareholders baying for blood?

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