After completing the successful implementation of new it systems at its dutch back-office operations usg people is set to take further steps to structurally reduce operating costs. The measures involved will deliver a structural improvement in the operating result of € 27 million on an annual basis. This will allow usg people to benefit from the it investments it has continued to make over the past few years, despite the crisis period.
The use of new technology, including a completed large-scale IT project for the Dutch back office as well as ongoing digitisation of the distribution channel, is allowing USG People to conduct its business more efficiently and cost-effectively. This has led to a permanent reduction and greater flexibility in the cost base, thus structurally strengthening profitability.
Following an intensive two-year programme a new computer system for the back-office processes was successfully recently taken into service, allowing support services to the operating companies to be carried out more efficiently and effectively. The successful implementation of this project means that job cuts at the back office can be realised more quickly than had been projected. In addition outsourcing of the hosting as well as workstation and infrastructure maintenance operations will make IT costs even more flexible.
In addition there will be further reductions in operating costs at the Dutch operating companies. The commercial organisation will be structured more effectively in tandem with more efficient distribution and back office processes. This means that the number of support staff will be reduced and services will be provided out of fewer but larger offices.
The planned measures mean job cuts equalling 360 of the 3,900 FTEs and the closure of 34 of the 614 offices in the Netherlands. The existing activities of these offices will be consolidated with those of nearby offices in such a way as to guarantee the continued coverage of the network in all regions. A provision of around € 16 million will be taken in the second quarter to cover the measures, consisting of a provision of € 13 million for redundancies and a € 3 million provision for the closure of offices. In addition a one-off charge of € 3 million will be taken in the second half of the year for accelerated depreciation of assets and outsourcing-related migration.
USG People expects to realise € 11 million in cost savings as early as the second half of 2011. From 2012 there will be a structural improvement in the cost level of € 27 million annually which will lead to a further strengthening of the profitability of the Dutch operation.
Source:http://www.reuters.com/article/2011/07/07/idUS154845+07-Jul-2011+HUG20110707
