Pacnet Australia won't escape staff cuts

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Pacnet Australia won't escape staff cuts

Despite head start on building out managed services business.

Australian workers at network and data centre operator Pacnet won't be spared from job cuts, despite having a headstart at executing the firm's new strategic direction.

Pacnet yesterday unveiled a series of transformative initiatives worldwide to refocus on "high margin core businesses, upgrading offerings, streamlining operations, and reducing costs".

It will cut its global workforce "in non-strategic areas and by a total of approximately 30 percent", saving $US30 million ($A29.3 million) a year.

A/NZ CEO Nigel Stitt confirmed Australia would not be spared from the cutbacks.

"We are part of the global company so there will be some reductions in the Australian business," Stitt told iTnews.

"I'm not going to comment on what percentage size.

"We run a very successful business here [but] there will be some realignment around staff reductions [to] support the acceleration of the direction we're going [in]."

Stitt said there was no broader pressure to slim operating expenses or capital expenditure in the Australian business.

He pointed to the company's recent investment to build out further stages of its Sydney CBD data centre as proof that Pacnet was not slowing its spending in Australia.

Drops residential ISP business

Globally, Stitt said a reinvigorated Pacnet hoped to focus "exclusively on carrier and enterprise customers", divesting its previous residential internet and wholesale voice offerings.

This would not impact Australia a great deal as the company had not pursued the residential internet market "for quite a number of years", Stitt said.

"We don't have a large consumer base in the Australian business at all," he said.

"They are a very small part of our business [in Australia] and we will slowly, organically, remove ourselves from that market."

Poaches Rackspace executive

Pacnet also hoped to make IT-as-a-service, and managed IT services generally, a bigger part of its value proposition.

It launched virtual private servers in Australia in September last year, and planned to drive into elastic cloud compute offerings in the near future.

The company created a global, "dedicated managed services unit" to be headed up by Jim Fagan, who spent the past four years setting up Rackspace's operations in Asia Pacific.

"It's certainly our plan to continue to build a managed services platform," Stitt said.

"Over the past 12 to 18 months, we've been leveraging our network capability by building more IaaS product types to really add to the value of the network."

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