150 jobs to go at Kcom

Hull telecoms firm Kcom has announced it is to shed 150 jobs as a result of an on-going review of its operations.

According to the company, based in Carr Lane, city centre, the jobs will go from its Internet and Managed Services (I&MS) division, Affiniti, which has seen revenues decline by 10 per cent year-on-year.

Affiniti has offices in Hull, Wakefield and Hemel Hempstead.

As first reported on the Mail's website, managers at Kcom are in a 90-day consultation with the affected employees.

The company said it was "currently working to identify which roles will be placed at risk" and was unable to comment on the extent of potential losses in East Yorkshire.

In a statement to The Mail, the company said: "In light of the difficult market, we are looking to accelerate Affiniti's move away from areas of low margin towards higher value activities, including projects that exploit advanced technologies, for example unified communications.

"To reflect this change in focus, a new structure is being put in place so target customers can be served more effectively.

"Regrettably, this will also include a head-count reduction of approximately 150."

The firm said about 150 Affiniti employees work in Hull, out of a total of 1,000 across the UK.

The losses represent six per cent of Kcom's total UK workforce.

In October last year, Affiniti was hit by the collapse of US investment bank Lehman Brothers.

The firm incurred a £1m material loss when the bank went into administration.

The episode was partly responsible for £107m being wiped off the value of Kcom's I&MS division, which led to the group reporting a pre-tax loss of £103m in the six months leading up to September 30 last year.

But the company said it was confident the latest round of redundancies would help improve Affiniti's flagging performance.

The statement said: "The reduction, in addition to reducing the cost base, is a key component in the transformation of I&MS that will see its focus shift to higher margin and recurring services.

"As a result, I&MS is expected to return to overall net profitability, before exceptional items, during the final quarter of the financial year."

According to the company's interim management statement, released yesterday, group financial performance in the nine months up to December 31 was bolstered by its Telecoms and Internet Services (T&IS) division, which includes local Internet service providers Karoo and Eclipse.

The division saw an increase in both operating profit and pre-tax profit during the period.

Despite the announcement of the job losses and trading conditions currently facing the company's I&MS division, Kcom remains positive for the year ahead.

The statement added: "In spite of the current economic climate and exceptional items associated with the transformation process, the board believes the group will end the financial year in a stronger position to deal with the current challenging trading conditions."

Source: This is Hull and East Riding, 31st January 2009

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