As predicted [WAMN: 13-Aug-01], Cordiant Communications yesterday announced a fresh series of staff cuts, as it conceded it had overspent on technology-related investments.
The precise number of job losses is unknown, but Cordiant revealed it aims reduce its salary bill by 5% (estimated at up to 700 staff), taking a £10 million charge in severance payments.
Contributing to the group’s woes was its eagerness to embrace the now-depressed tech sector. “There was rash over-investment by many companies who hoped that the growth in these areas would go on for ever,” commented chief executive Micahel Bungey, admitting that Cordiant was one such company.
On top of the tech slowdown, Cordiant has suffered from delays in project launches by certain clients, forcing it to postpone to 2004 its performance target of achieving 15% operating margins by 2003.
News source: The Times (London)