Logicalis to verticalise its business in UK restructure

MD stresses that net headcount reduction will be minimal as systems integrator lines up behind select verticals such as higher education and financial services

Logicalis is "verticalising" its UK business under a restructure that will lead to a small number of redundancies.

About 15 of the systems integrator's 60 UK sales and pre-sales staff are set to leave the business following a consultation period which started last Monday, Logicalis UK managing director Bob Swallow (pictured) confirmed to CRN.

But he insisted that the restructure is about changing the way Logicalis serves its customers, rather than cutting jobs, claiming that the net headcount reduction will stand at just four employees.

"There are about 15 people that are affected in terms of redundancies, if that's what they choose - there are other options," he said.

"The reason for this is we are verticalising our approach to the market, which we declared internally pre-Christmas. We need closer intimacy with our customers. We have always talked about providing business outcomes and solutions, but to do that we really need to understand the business issues in the vertical markets. And to do that we need people who are focused specifically on the verticals we are addressing."

Logicalis' key verticals will be higher education, healthcare, local government, financial services, legal, manufacturing, retail and construction.

"We are also recruiting from the vertical markets for consultancy-type people to engage in a different way with our customers," Swallow added.

Logicalis has about 400 UK staff. Its Information Insights business, based on its acquisition of Trovus, is not affected by the restructure, Swallow said.

Logicalis' UK business sank to a loss in its fiscal 2016 but Swallow said the company has changed a lot in recent months.

"We have invested an awful lot in the UK in the last two years," he said. "We've built a new optimal cloud platform and invested millions into that, and have invested £3.5m into our datacentre in Bracknell, so there has been heavy investment. We've also increased the headcount in the services element of our business by about 20 in the past 12 months. We are going through a lot of change, and that's no different from the vendors and a lot of competitors."

Swallow also hinted that Logicalis may forge closer ties with Dell EMC as it carries out a review of its strategic vendors, which are currently Cisco, HP, IBM, VMware and NetApp.

"Dell EMC are certainly going through growth at the moment, so we're tracking that," he said.

"We're obviously watching HPE and the development of their strategy as they've sold their services and software business. We will certainly be adding to our portfolio. I think there will be more focus on F5 Networks and Palo Alto Networks from a security point of view, which is a shift in gear for us."

The restructure is set to complete by the beginning of Logicalis' financial year on 1 March, with the employee consultation period formally last 30 days. "But I expect us to complete it sooner than that," said Swallow.

Paul Sweeney, chief executive of fellow Cisco Gold partner ANS, said: "Logicalis has always been a pretty solid company, but I don't think this is a market thing, because we are doing well. If people are looking for a home, ANS would be interested in talking to them."