LogicaCMG has confirmed to siliconrepublic.com that it intends to significantly scale back its Irish operation, with the loss of 300 jobs in Dublin and Cork.
The UK software and IT services firm announced the closure of its wireless development centre in Cork with the loss of 90 jobs and the loss of nearly half its workforce in Dublin. 210 jobs out of 450 are expected to go in the capital.
The company cites Logica’s takeover of Anglo-Dutch company CMG last October as the reason for the job cuts. The €796m takeover of CMG was an all-share merger, with Logica owning 60pc and CMG the remaining 40pc of the combined entity.
Analysts said the deal, which would create Europe’s third largest information technology (IT) services firm after Cap Gemini Ernst & Young and Atos Origin, is a reaction to the slowdown in demand for IT services among leading corporate clients and of a drop in spending on equipment by wireless companies.
The merger comes after both companies saw their shares slump more than 80pc in the past year and the prospects decline that European businesses will resume spending on technology soon.
Over 1,400 jobs worldwide or 6pc of the new LogicaCMG group are expected to go due to the takeover.
Earlier last year, Logica confirmed 700 job cuts in its worldwide operations including 160 in Dublin and in November 2001 the company let 90 people go in Cork.
The Minister for Enterprise, Trade and Employment, Mary Harney TD, says that the loss of over 300 jobs in LogicaCMG was disappointing and unexpected, but adds that the company’s decision was clearly a result of the downturn in telecommunications markets around the world as well as a consequence of the merger between the Logica and CMG operations. “I understand that the company is announcing lay-offs across its operations worldwide and while that is of little consolation, it does underline the fact that job losses in the industry are not a phenomenon that is unique to Ireland. But the wheel always turns a full circle and the challenge facing us now is to ensure that we continue to get the fundamentals in our economy right so that we are better placed than others to benefit from the turnaround when it comes,” she said.
By Lisa Deeney