Morse, the IT services group, yesterday became the latest British hi-tech company to fall victim to the difficult economic climate, as it warned of imminent job cuts and a management reorganisation aimed at cutting costs.
Morse stock closed down 17.5p at 300p, after plunging as low as 250p when the market opened. The group said it needed to save £5m in the next year to compensate for a 15 per cent fall in April sales, caused when investment banks deferred and cancelled orders.
Morse blamed "customers' uncertainty about the economic environment" for the decrease, rather than oversupply. Mark Byatt, Morse's marketing director, said: "Customers are taking longer to spend their IT budgets and are analysing what return on investment they get in a short-time period."
Morse, which employs around 1,300 people in Europe, of whom 900 are in Britain, said it was too soon to predict where it would axe jobs. Where appropriate, Morse said it would combine some smaller units into larger ones to cut overheads.
Graeme Clark, an analyst at ING Barings, said he expected to see Morse cut back its e-commerce units, Hughes Rae and Recreation.
The company said sales rose to £151m in the third quarter, from £134.7m, and over the first nine months rose 36 per cent to £458.8m.Reuse content