Avanade, the services and consulting company formed in a joint venture between Microsoft and Accenture (formerly Andersen Consulting), has retrenched one-third of its workforce an inside source has revealed.
Mark Chrimes, managing director for Avanade Australia confirmed that 25 of the 75 Australian employees had been let go this week.
Six months ago, ARN revealed the company had been poaching top IT consultants from PwC, Praxa and CSC. Chrimes stated at the time that by December this year (2001), it was his intention that staff numbers would climb to a total in excess of 150.
"We had recruited to support a certain level of demand which in the current climate, just isn't happening," Chrimes said on Friday. "The revenues have not grown as we had expected."
Chrimes said the company is still growing, but slower than expected. He said the company is currently negotiating two contracts worth in excess of $1 million.
While globally Avanade made small staffing adjustments several months ago, Chrimes said the new cutbacks were restricted to the Australian office.
Sources suggest retrenched staff have been given their pink slips and will be advised of their redundancy packages on Monday morning.
"This is an emotionally difficult time for everyone, but all staff recognise the need to keep building a successful business," Chrimes said. "Like any young company we have to make adjustments as we start to understand our place in the market."