CenITex to cut 60 more staff

Victorian shared services agency CenITex will let a further 60 staff members go in an ongoing workforce reduction drive which has already seen 90 percent of its contractors and around 50 full-time employees cut in recent years.

In an email sent to staff this afternoon, sighted by iTnews and as first reported by Delimiter, the agency’s CEO Michael Vanderheide said a continuing need to reduce costs would mean that the workforce would be reduced by approximately 60 roles.

He said while CenITex workers had done an “excellent job” containing and reducing costs, demand and related revenue for the coming financial year was forecast to decrease by $11 million, or 8 percent, compared to the current year.

“This drop is driven in part by a number of our customers channelling some of their spend on base ICT services differently to take advantage of new ICT market opportunities, such as cloud based services,” Vanderheide informed staff.

“These are the same market opportunities that we are working to access for our customers more generally via Program Evolve. In addition to the impact of the revenue decrease for base ICT services, we also forecast a decrease in project demand and associated project revenue.”

Most areas of the business would be affected, with Vanderheide singling out management, non-management, corporate, project and operational areas.

The reductions would be met by natural attrition, the consolidation of roles and the removal of roles “where demand for services is dropping, or where work practices or priorities change so that fewer resources are required.” It will be enacted over the next four months.

The agency is only just recovering from a 90 percent reduction in contractors over the past two financial years.

CenITex revealed in its most recent annual report that it currently engages only 15 contractors compared to the 251 it employed in 2011.

Around 50 full-time staff were also let go in 2012.

The shared services agency has been struggling with a dwindling customer base, an inability to compete with vendors’ lower costs, and less funds available for asset refreshes as its traditional customers move increasingly towards cloud services.

The Victorian government revealed plans to outsource the agency’s functions midway through last year, and in this week’s state budget allocated $6 million towards dismantling the agency and replacing it with several outsourcing deals.

The office of Victorian IT minister Gordon Rich-Phillips has declined to comment.