Logical undergoes major reshuffle

UK-based network systems integrator Logical Group, the reseller arm of holding company Datatec, is cutting 130 jobs and closing down its PC and commodity server divisions in an attempt to improve profitability.

UK-based network systems integrator Logical Group, the reseller arm of holding company Datatec, is cutting 130 jobs and closing down its PC and commodity server divisions in an attempt to improve profitability.

Managing director Laurie Stevens has left the company to return to his native Australia, and Logical's Birmingham warehouse has been closed down. Former consultant Alex Black will replace Stevens as UK chief executive.

The company is also being restructured into four business units - strategy, ebusiness, infrastructure and a network-managed services group - through a merger with wholly owned subsidiary Satelcom.

Just six months ago Logical outsourced the logistical operations of both its failed divisions to broadline distributor Computer 2000 (C2000), a decision Black said he would not have taken.

"I would have exited both businesses in August. There were teething problems with the arrangement and we both had hiccups. It could have been handled better," he said.

Stevens declined to comment on whether the decision to outsource the businesses had been a mistake, and said his departure from Logical was "unrelated" to the staff cuts.

Black explained that moving out of the PC and commodity server markets would allow the company to focus on enterprise products. "It is a strategic withdrawal. Logical was spread too wide to be excellent at everything it did. We are returning to core competencies," he said.

But an unnamed source close to C2000 was critical of the way the logistical outsourcing had been handled. "C2000 didn't understand what Logical was trying to do, but it learned at [Logical's] expense. Logical was asking it to understand the end user, and that is the reseller's job. It was a disaster waiting to happen," said the source.

Julien Klein, managing director of C2000, also declined to comment on accusations of poor service, but said it had not tried to convince Logical to keep the divisions open and called the move "immaterial".

"Logical was very unsure of its requirements going forward, so C2000 had no time or revenue expectations from the deal," Klein said. "Logical had fundamental business problems when it entered the agreement."

First published in Computer Reseller News