An exodus of key staff and customers from 2e2 has scuppered any prospect of a sale of the integrator, according to one firm which has been in talks with the administrator.
Administrator FTI Consulting confirmed that 627 more jobs were cut this morning after a failure to conclude a sale of the firm as a going concern – coupled with funding issues – meant that large parts of the UK business had to be closed.
This means that nine days after 2e2 fell into administration, 977 out of 2e2's 1,442 UK staff have now been let go.
Simon Granger, joint administrator of 2e2, added that FTI is still in discussions with customers to "secure the ongoing operation of the datacentres and service desks while alternative options are sought".
Mike Norris, chief executive of Computacenter (pictured below), confirmed that his company had had a brief look at 2e2's UK business before concluding that it was not of interest.
"We talked to management and within an hour I wrote a note [to a colleague] saying I didn't want to do this," he said. "I stayed for another three hours because I'm polite. We didn't look for long and if there was anything of value, someone would have bought it."
The boss of one rival who has been in talks with FTI said that barring the datacentre business, there is now effectively nothing left to buy because the UK business has already been dismantled by competitors behind the administrator's back.
"Key people have joined competitors who have been picking over 2e2's carcass like a bunch of vultures," said the source, who wished to remain anonymous.
"Because rivals have taken the business apart in an unofficial manner, that has made it extremely difficult for the administrator to salvage any value. Even as we speak, customers are being poached left, right and centre."
A cursory Google search for "2e2 in administration" reveals the extent to which rivals have mobilised themselves, with Phoenix, Equanet, Complete IT, Business Connexion and Codestone among those touting their services under sponsored ads.
In a letter to employees today, FTI included the contact details of seven firms that had approached them that staff could contact regarding potential vacancies: Micro P, Acando, UK, Insight, Computer People, Fuel Recruitment, Warner Knight and DCL Search.
One firm that is in the process of taking on two of 2e2's security staff is security VAR Integrity Solutions, whose UK arm was set up last year by former 2e2 account director Mark Evans.
But Evans stressed he is enlisting the duo for their technical prowess as Integrity looks to offer customers a migration path to an alternative provider, rather than for their customer relationships.
He agreed that it would now be difficult for the administrator to salvage much from the wreckage because most customers are now at least evaluating alternative suppliers.
"As an ex-employee of 2e2, this is a situation I don't find positive," Evans said. "I have friends and relationships there and its employees are exceptionally good individuals who will not have any problems finding alternative work.
"My feeling is that it has gone too far. From our side I can vouch for the fact that customers are evaluating their position in terms of alternative suppliers."
FTI stressed that 2e2's international operations continue to operate outside any insolvency process and are subject to an orderly sales process.
Norris confirmed that Computacenter will take a look at 2e2's businesses in Spain and Ireland but predicted that a deal would be unlikely.
"It is sad that a lot of people have lost their jobs but I am sure the vast majority will be redeployed in the industry," Norris added.
"Hopefully, customers will be more diligent in future to buy from companies with better financial stability. While the speed of 2e2's decline in the past few weeks has been dramatic, the fact it has declined should not be a surprise."
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