Staff losses sweep industry

Redundancies strike as upturn proves elusive

Despite glimpses of an upturn, redundancies continued to hit the industry last week.

Networking reseller Logical has made 30 people redundant and is attempting to 'rebalance' its skill base with an increased focus on voice and data convergence. The network integrator, which comes from a data background, is looking to become less reliant on Cisco data networking product sales.

Logical UK managing director Simon North admitted: "We did not have a good year last year."

The move leaves Logical UK with about 135 workers. Mark Darvill, director of technology and business development, is one of the casualties.

North said: "To stay purely in the data networking business with a dependency on Cisco wasn't going to give the kind of growth and profitability required."

He said the company may recruit new staff to bolster its convergence knowledge. "We will bring in the voice skills to enhance our convergence capabilities."

Manny Pinon, sales and marketing director at distributor Norwood Adam, said the move from data to convergence is a challenge. "The redundancies probably have more to do with the fact that Logical, like all of us, has had a bad time after a poor trading year," he said.

Poor market conditions also affected outsourcing company LogicaCMG, which laid off more staff than it had predicted following its recent merger with CMG. The firm had expected to lose around 1,400 staff worldwide from a combined head count of just over 24,000. It has laid off 1,700 so far.

A representative said: "We will probably have to lay off another 450 staff worldwide. About 850 staff have gone from our UK businesses."

Steve Brazier, principal analyst at research firm Canalys, said: "Whenever you have two companies merging, there's always a shake-out in terms of performance."

He said the public sector continued to be the industry's "bright spot", due to increased government spending on IT.