Norwegian IT supplier Evry has announced up to 550 job cuts as part of a restructuring programme aimed at boosting profits and its ability to compete in the Nordic market.
In the 2014 financial year, Evry ASA posted a loss of NOK83m (£6.5m) on operating revenues of NOK12.7bn.
The job cuts, to hit between 500 and 550 staff in Norway and Sweden, are aimed at saving NOK400-500m a year. The job losses are in addition to a restructuring plan that began in 2013 after Evry lost a major contract with Norwegian Bank DNB to Indian firm HCL Technologies.
"To reach the goal of being the Nordic champion in IT services, we have to improve our competitive position and increase our profitability,” said Evry CEO Björn Ivroth. "This is particularly important in order to create room for investments in new services and knowledge.
“In addition, we need to put in place measures that simplify internal processes and help the company to become even more agile and customer-centric.”
Evry Norway, which employs more than 6,000 people, will be streamlined by merging divisions. A simpler operating model will be implemented in Sweden, while the number of businesses in the group will be reduced, along with cuts in sales, administration and support staff and the number of external contractors.
The company's restructuring costs are estimated at NOK260-320m.
Norwegian firms that sell to international markets have enjoyed increased global competitiveness over the past year thanks to a fall in the value of the Norwegian kroner against the British pound and US dollar. Currently, one British pound buys 12.88 kroner, compared with 10.12 a year ago.
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The currency movement should make Evry more competitive against its Eastern European outsourcing rivals, most of which bill in euros.
But it seems cost is not the main factor for Scandinavian firms looking for IT services. A shortage of skills in the Nordic region means firms are increasingly looking east for the flexibility and breadth of experience they require.
Despite the conflict affecting the eastern half of Ukraine, business from Nordic clients accounts for 40% of the turnover of Ukrainian IT services firm Ciklum.
Meanwhile, Evry remains fourth on the list of companies Norwegian IT students most want to work for, ahead of IBM, Cisco, Telenor, Capgemini and Norwegian rival Bekk Consulting.
A day after the job cuts were announced, Evry signed a three-year deal with Svenska Golfförbundet (the Swedish Golf Federation). and logistics company Göteborgs Lastbilscentral (GLC) selected Evry to provide it with a new business solution.
