Troubled Anglo-Dutch consultancy LogicaCMG is to make 500 redundancies in the UK, out of a total of 1,300 jobs axed in Europe. However, it has announced plans to double the number of its offshore staff to 8,000 by the end of next year.

The move came after chief executive Andy Green ordered a company-wide review of the IT services company. The conclusion was that the headcount was too small, but that the company could not afford to expand by hiring personnel in the UK or Europe.

LogicaCMG disclosed that the programme, which will cost £110 million to implement, would bring £80 million in cost savings by 2010.

Green joined the company from BT in January this year, taking over from Jim McKenna, LogicaCMG's chief operating office. McKenna left after a profit warning had led institutional investors to demand changes to the board. Chief executive Martin Read was also forced to resign at the same time.

Green promised to increase profit margins by 0.5 per cent in 2009 and by between 0.5 per cent and 1 per cent in 2010.

“We have set out an exciting programme for growth, built upon our great strategic position," said Green. "We will increase our investment in growing the Logica business, funded by a cost-cutting programme that will reduce overheads. "

The company will also complete a rebranding, previously announced by Mr Green in February, that will see it drop "CMG" from its name, six years after Logica and CMG, once arch rivals, merged after the dot-com bubble burst in 2001.