"We are taking steps to reduce staff numbers and cut costs in order to secure our competitiveness and retain our position as the strongest player in the markets where we operate", explains Bjørn Trondsen, CEO. "EDB Business Partner will continue to be a financially sound company with extensive technical expertise which provides attractive and challenging employment for its staff. It is essential that we maintain the group's expertise and commercial strength if we are to remain competitive and achieve future growth. We are now taking steps to adjust our capacity to the current level of activity, and this means that capacity which was built up when conditions were more favourable must now be reduced", adds Bjørn Trondsen.
"The reduction in staff numbers is a necessary response to the level of activity we expect to see in our various business areas in 2003. The measures we are now implementing result directly from the evaluation of market conditions that we communicated in our third quarter interim report. We have used the time since the publication of the interim report to evaluate the measures needed and their scope. We are now in a position to implement a controlled reduction in staff numbers while ensuring that we retain the necessary expertise and have the right level of capacity, as well as maintaining the necessary financial strength", comments Bjørn Trondsen.
"Decisions on the staff affected by the reduction in headcount will be made on the basis of criteria that have been discussed with the employees' representatives. The most important factor will be the individual's expertise seen in relation to the needs of the company and its customers. We will also take into account length of service, age and personal circumstances. We hope that sufficient numbers of staff will accept the voluntary termination packages we offer them so that we can avoid having to make any compulsory redundancies", says Bjørn Trondsen.
As the consultants laid off earlier in the year return to work we have excess capacity relative to the level of market demand. This business area is not profitable with its current level of headcount. The reduction in staff numbers is designed to adjust capacity to the level of demand we expect in 2003, while allowing some spare capacity to give scope for new projects.
The reduction in staff numbers in this area of the group's activities will be in the order of 50-60 full-time equivalent positions.
The state of demand in the domestic market largely determines the level of activity in this business area and hence the staff numbers required. We are not budgeting for any growth in demand in the domestic market in 2003. This means that this business area will have excess capacity once the staff currently laid off return to work on 1 December.
It is therefore necessary to adjust the capacity of this area of the group's activities by reducing staff numbers by 30-35 full-time equivalent positions.
Bank & Finance
The integration of the Novit and Fellesdata product platforms has just been completed and the majority of customers have converted to using the new systems platform. This means that the business area is now in a position to realise the synergies previously announced and therefore ensure an improvement in its profitability. The growth in market demand for IT services from the banking and finance sector that was expected when Novit and Fellesdata were merged in 2000 has not materialised, and it is therefore no longer possible to realise synergy benefits in the form of increased revenue.
The business area will also implement restructuring measures in its other units.
The reduction in staff numbers in this area of the group's activities will be in the order of 90 full-time equivalent positions.
Computer Operating Services
The level of activity in the group's Computer Operating Services business area is satisfactory, and the business area is generating satisfactory profitability. The Computer Operating Services business area will continue to implement the cost saving measures initiated in 2001, but there are no plans to implement additional cost-saving measures.
EDB Business Partner will make provisions totalling NOK 65 million in its fourth quarter accounts in respect of the costs involved in reducing staff numbers. This amount is made up of NOK 21 million for Consultancy Services, NOK 13 million for Telecommunications and NOK 31 million for Bank & Finance. The group expects that the full effect of the reduction in staff numbers on profitability will be seen in the first quarter of 2003.
Oslo, 28 November 2002