Friday, 28 August 2009

iSoft trims workforce

By Karen Dearne

GLOBAL restructuring by iSoft will lead to job cuts in service delivery in some regions, including Australia and New Zealand, despite the company posting a 137 per cent rise in net profit to $34.7 million last week.

iSoft executive chairman Gary Cohen says a possible 70-100 IT positions may be lost in Britain - or around 10 per cent of the British workforce - but the overall impact would be offset by plans to add up to 50 new sales and marketing people to drive business growth.

According to Britain's E-Health-Insider, iSoft plans to reduce its frontline staff headcount from 193 to 131 through redundancies, and merge the support and technical teams into a single unit.

But Mr Cohen told The Australian that the restructure was "not about cost-cutting".

"This is about tailoring our operations to changed market dynamics, particularly in the UK where the old business was very focused on servicing the National Health Service's IT reform program," he said.

"While we're still working alongside CSC on those contracts, we're moving into a growth mode at the same time and for that the organisation requires a different set of skills.

"So this is about growing our businesses. We're currently a company with revenues of $600 million, and we want to more than double our size in the next three to four years."

Mr Cohen said a process of "bottom-up consultation" on corporate culture change and upskilling has just begun in the Australian and New Zealand operations, as well as in its Malaysian, Middle Eastern and Indian offices.

"While we're not looking at the same sort of restructuring as in the UK, the Australian operation equally needs to align its workforce to the dynamics of the market, and obviously with what's happening at both the state and federal level we're upskilling our competencies and looking to bring on higher-calibre personnel," he said.

"In that process, there may be people whose skill sets don't fit the new model, but we're still evaluating the situation and working through how best to achieve those outcomes."

Mr Cohen said no decision had been taken on likely job losses, but agreed there would be "people who are left behind".

"Let's be very clear, we are driving a cultural change in our company," he said. "Every industry and company needs from time to time to reshape and reposition itself.

"The overwhelming majority of our employees are totally motivated and focused on the future.

"Inevitably there will people who feel they don't fit in any more, and people who we think no longer fit, and that's a conversation we are having within parts of our organisation around the world."

In a statement to the Australian Securities Exchange this week, Mr Cohen said expected to "see more efficiencies come through from further restructuring of the UK business in the current year".

"We'll also continue to focus on building up our sales and marketing: under its previous ownership the company had become too reliant on the NHS connecting for IT program rather than building its own sales teams."

iSoft is also banking on changes mooted by Britain's opposition Tory party, that would allow local health services to deal directly with IT vendors such as iSoft, which holds 60 per cent of the English market.