Getronics NV, one of Europe’s largest IT services companies, will lay off 1,400 people to cut costs, it announced Friday. The company also issued an earnings warning.
This second round of job cuts at the Amsterdam company will mainly involve operations in Italy, the Netherlands, Spain, France and Mexico and should be completed by June next year, Getronics said in a statement.
Last year, 1,450 employees were made redundant in Getronics locations around the world.
The cuts and other cost saving measures should save Getronics 85 million euros (CDN$134.8 million) per year, it said. The company employs 26,000 people in over 30 countries and reported 1.84 billion euros in revenue for the first half of 2002.
Customers should not be affected by the cuts, said Getronics spokesman Herbert van Zijl. Getronics is adjusting the number of employees to the amount of work that is available in the continued tough economic climate, he said.
The market in the second half of 2002 is tougher than Getronics expected it to be when the company issued its second-quarter and first-half results, forcing it to lower its full year 2002 EBITA (earnings before interest, taxes and amortization) forecast from 125 million euros to 110 million euros, said Van Zijl.
Getronics hopes to see the first signs of a market recovery in the second half of next year, but does not expect a meaningful recovery of the IT services market until 2004, when companies should need to upgrade equipment bought between 1997 and 1999, it said.
