The IT firm Xansa took the lid off plans to axe 250 jobs yesterday after warning that tough trading conditions had held back its IT consulting division.
Admitting that the immediate future was still "hard to read", Xansa said it expected sales at its Business Change consulting division for the year to be 20 per cent beneath last year's level.
Shares in the company, formerly known as FI Group, closed down 46.5p at 302.5p after it conceded Business Change would now only break even for the year. Analysts had been expecting it to contribute around £6m.
Hilary Cropper, the executive chairman, said: "Whilst taking a cautious view of the coming months, the board remains confident that the actions it has taken along with the company's prospects for further growth will underpin management expectations for next year."
The 250 job cuts, which represent about 4 per cent of the company's total workforce, are expected to be made worldwide with the bulk falling in the hard-hit Business Change unit.
Xansa said the move to cut costs further would force it to take an extra £4.5m restructuring charge bringing total restructuring fees to £8.5m and cost savings to £15m a year.
The move came as Xansa reported a £23.1m pre-exceptional, pre-tax profit in the six months ended 31 October up from £15m last time. Sales were £269m, up from £204m.
The Business Change unit, which accounts for some 16 per cent of sales, suffered a 5 per cent drop in sales in the half year to £41.9m compared with the same period last year. Its sales, however, fell 14 per cent from the previous six months.
The company, which also announced a three-year £15m support contract with Tesco, said yesterday it was holding its half-year dividend at 1.08p.