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Ben Woodhead | June 06, 2007
OUTSOURCER EDS Australia has taken a razor to permanent, contract and temporary staff numbers in a move that slashed $47.5 million from its wage bill last year.
The cuts included the loss of 186 full time jobs over the 12 months to December 31. The number of permanent workers employed by the company was 3794 at the end of the period, down from 3980 a year earlier.
The job losses were accompanied by a reduction in contract and temporary workers that helped pare back EDS Australia's employment expenses by a hefty 8.2 per cent to $534.3 million during the company's 2006 financial year.
The figures were reported in EDS Australia's annual accounts filed with the Australian Securities and Investments Commission.
EDS' local managing director Chris Mitchell said that the workforce reduction was part of a broader restructure of the company's domestic business and that temps and contractors had borne the brunt of the cuts.
"As we've been driving productivity … we've obviously been looking not to reduce our own staff but to reduce contract labour," Mr Mitchell said.
The revelation of the job cuts came as EDS won an unexpected extension to its ten-year, $5 billion contract with the Commonwealth Bank, which was due to expire in October this year.
Mr Mitchell said that the CBA would continue to buy desktop and application services from EDS Australia at least until May 28 next year but did not reveal the value of the agreement.
The Commonwealth Bank has been assessing potential desktop and applications services suppliers for some months and will continue to do so.
"The CBA Group is conducting a series of reviews of global best practice in IT but it's important that operations continue smoothly while this is taking place," CBA chief information officer Michael Harte said in a statement.
The extension will be a relief to EDS, which has made retaining customers a core component of the restructure, which also generated major cost savings for the company during its 2006 financial year.
The cost savings put a rocket under EDS Australia's 2006 profit and the company's accounts showed that that net income jumped from $5.8 million a year ago to $18.6 million at December 31. But the result was still well below EDS' 2004 performance when it reported a $74.1 million net profit.
The 2006 profit improvement also came despite a fall in services revenue at the company, which is Australia's second largest IT outsourcing provider behind industry heavyweight IBM.
EDS Australia's revenue from the delivery of services fell from $1.29 billion at the end of 2005 to $1.17 billion last year. The subsidiary reported $1.27 billion in services revenue in its 2004 financial year.
Mr Mitchell attributed the nearly 10 per cent decline in revenue in 2006 to efforts by the company to pass cost savings onto to customers through cheaper pricing.
"The big two movers on that would be the big two renewals we secured last year with the Commonwealth Bank and South Australian government," Mr Mitchell said.
EDS enjoyed a number of wins during 2006, including the renewed mainframe and mid-range outsourcing agreement with the Commonwealth Bank, which is worth $573 million over five years.
The mainframe deal is separate to the seven-month desktop and applications outsourcing contract extension.
Other cost savings logged by EDS Australia during 2006 included an 8.4 per cent year-on-year reduction in administrative expenses to $140.6 million and a $3.2 million fall in travel expenses to $15.1 million.
The subsidiary also managed a massive reduction in its computing costs, which fell from $326 million a year ago to $291.2 million.
Mr Mitchell linked the reduction in travel expenses to EDS' Going for Green initiative launched in March this year, which is aimed at reducing the organisation's greenhouse gas emissions. The company has cut air travel as part of the program.
Mr Mitchell also said that he believes the company is now positioned to capitalise on a number of emerging opportunities including business processing outsourcing deals such as credit card processing.
The company is looking to cash in on the Defence market through a new Australian defence services unit that was launched in February. |
发表于 7-6-2007 21:31:28
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