Logicalis UK restructure could result in job losses

'We are not as agile as we should be', Logicalis European boss tells CRN as he confirms UK MD Bob Swallow will leave the business alongside other potential cuts

Logicalis is restructuring its UK arm, with head of Europe Ruediger Rath telling CRN that the business is "not as agile and focused as we should be".

UK staff at the global Cisco partner were today informed of a refocus and restructure that could result in job losses. UK headcount stood just below 400 in its last financial year.

Rath, who was in the UK today to talk to affected employees, admitted the performance of the UK business has lagged behind that of Logicalis' other major European territories, including Germany and Spain.

Still reeling from the loss of a key Welsh public sector deal in 2014, the UK business has not been in the black since 2015. In Logicalis' last financial year ending 28 February 2018, UK net losses narrowed from £8.6m to £2.7m on revenues that declined 7.5 per cent to £107.9m

"Most of the other European countries are above budget. In the UK we have a different situation," Rath said.

"We are not as agile and focused as we need to be."

Rath declined to comment on the scale of potential job losses, but he emphasised that the goal is to refocus and build an organisation possessing "the functions we need to get success", including strengthening in areas such as software-defined, automation and hybrid cloud.

A consultation period with impacted staff will last for 30 days.

"We are doing all we can to support the employees by searching on a European level. We have to maintain our high customer service levels, but on the other side we have to get more relevant, agile and focused," he said.

Logicalis drew 28 per cent of its $1.6bn revenues from Europe and South Africa in its fiscal 2018. The Cisco, IBM and HPE partner generates the vast majority of South Africa-listed parent Datatec's profits.

But its UK arm, which was a £200m-revenue business as recently as 2015, has been stuck in a cycle of losses and contracting sales in recent years. This is despite attempts to simplify the business and nearshore some support roles to South Africa. In its fiscal 2018, the UK business incurred £3.7m in expenses related to the strategic transformation of its business.

Rath will act as interim UK MD while Logicalis seeks Swallow's successor, who will be supported by a slimmed-down UK management team comprising COO Natalie Matthews, UK sales director Gary Lomas, and pre-sales and services director Fanni Vig.

Solutions director Gerry Carroll will also leave the business at the end of April, said Rath, who thanked both Carroll and Swallow for their services to the business.

"I would like to express our gratitude to Bob for his effort over the past four years. I hope to appoint a new MD in due course," he concluded.