Services giant Logica is cutting jobs and slashing its property portfolio as it prepares for tough economic times next year.
The firm, which is looking to axe about 1,300 jobs across several European territories, revealed its clients are "delaying short-term expenditure" and "reducing discretionary investments" to weather an "uncertain economic future".
In a statement to the London Stock Exchange, the firm said: “The pockets of weakness that we first saw in September have widened through the quarter.”
It added that it expects full-year growth to be about three per cent, with profitability in the range of £240m to £250m.
“We are therefore accelerating the restructuring that we would otherwise have spread over the next two years,” it said. “This will lead to charges in the current financial year of around £80m related to restructuring of jobs and £13m relating to property.”
Jobs will be lost in the UK, the Netherlands, Belgium and Sweden, it revealed. The moves will save the firm between £25m and £35m, it said, allowing it to make full-year operating margin of more than six per cent. It will also take a one-off charge of £39m, to reflect any contract losses, which will be taken off its 2011 figures.
The statement added: “We are confident that taking tough decisions today will deliver the stability that our clients, the rest of our people and our shareholders need in difficult times and will build a more sustainable business for the future.”
Andy Green, chief executive of Logica, said: “We deeply regret the impact job losses will have on the people affected in many of our businesses. But we are confident that it is best for our clients, people and shareholders that we face squarely into the difficult economic conditions ahead.
“This decisive action will result in sustainable margin improvement in 2012, with the benefits starting to flow through in the second half. It will also ensure that a strong Logica can concentrate on helping clients to use technology to cut costs and serve their customers better."
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