IT services outsourcer Logica is axing 1,300 jobs in the wake of a profits warning, and as the Eurozone crisis deepens.
Logica said the cuts represented around three percent of its workforce. The restructuring, which includes disposing of some property, will cost the firm at least £93 million in one-off charges, in addition to a £39 million charge taken by Logica that is linked to re-evaluating some of its contracts.
The 1,300 job cuts, which are spread across the Benelux region, the UK and Sweden, are expected to eventually save the firm £50-£60 million a year, Logica said. Around 225 jobs are expected to go in the UK.
Logica said "pockets of weakness" it first saw in September "had widened through the quarter". It now expects full year revenue growth to be around three percent for 2011. Full year results will be announced on 22 February 2012.
Andy Green, Logica CEO, said: "We deeply regret the impact job losses will have on the people affected. But we are confident that it is best for our clients, people and shareholders that we face squarely into the difficult economic conditions ahead. This decisive action will result in sustainable margin improvement in 2012."
Wednesday's job cuts announcement comes in a week the government said it was awarding Logica with a framework HR and finance services deal worth up to £500 million.