Logical cuts

Network and systems integration conglomerate Logical has cut 50 staff across Australia as part of its major corporate restructure slated for completion in March.

The Datatec-owned company has trimmed the fat accumulated by a series of acquisitions designed to propel the company into e-business integration and services. But the lay-offs come as no surprise to Logical after it outlined plans to consolidate its offerings around high-growth areas such as storage, CRM, IP telephony and portal development, claims Lyle Potgeiter, CEO of Logical Asia Pacific.

"It's been a bit sensationalised," claims Potgeiter. "The cuts are due to integrating the acquisitions we've made."

With companies holding off on major migrations and systems upgrades, services revenue has become paramount - a fact Potgeiter attributes to Logical's positioning around high-growth areas rather than the "WinTel" space - Windows- and Intel-based solutions. "It's not just that services will be a major factor - they already are."

The cuts occurred across the entire company, Potgeiter confirmed, with management, technical and administration personnel all receiving their golden handshake. Some of the positions retrenched included duplicate roles from Logical's acquisitions of companies such as the CNI Group, Corporate Computer Services NSW and Victoria, C:Drive, Anite Networks Australia/New Zealand and ACT Networks.

Logical is currently in the throes of combining its regional offices in each state. The company already combined its Perth offices in June and Potgeiter claims the result has seen a significant increase in productivity. Logical is expected to complete the combination of its Sydney offices this week, followed by Melbourne in February.

The revelations follow the trend established by a number of channel companies, which have grown through acquisition. Praxa laid off 63 staff in late October ARN, November 6, page 6], while Queensland-based Data#3 has culled around 40 staff over the past six months.