RM exits PC builder market and plans 300 UK job cuts

Specialist education VAR will instead concentrate on software and services

Education reseller RM has announced plans to cut its UK headcount by 300 and to stop building PCs in an effort to improve profitability in its Education Technology (ET) business.

The firm announced this morning that 300 UK staff, including temporary employees, would be made redundant over the next 12 months. It said consultation with affected employees would begin immediately.

On top of the staff axe, RM indicated that it is exiting PC building as the low-margin market declines. It added it would significantly reduce the scale of its sales and marketing activities across the ET division and will also be making cutbacks to central services functions. It would continue to supply third-party infrastructure hardware as part of its services, the firm said.

The move follows the demise of the lucrative Building Schools for the Future (BSF) programme. RM is still generating sales from those projects yet to be completed, but has previously warned that it will have a £40m hole in its top line when the scheme is finally laid to rest for good. The loss of BSF revenue, combined with today's announcements, is expected to slash its ET sales in half over the next two fiscal years as well as prompt a one-off cost of £10m.

The firm was keen to stress its other businesses – Assessment and Data Services and Education Resources – remain unaffected, and that the move reflects its wider investment in software and services.

"ET continues its successful record of extending services and software contracts with existing customers," it said.

"Over the past 18 months ET has launched new software propositions, including RM Unify and RM Books, and has won new customers for its established RM Integris School Management Systems. The business continues to invest in these and other new offerings."