The jobs of around 100 staff from Darwin-based ASX-listed IT services firm CSG hang in the balance as the company looks to shed headcount after losing several contracts it had acquired from Commander.
"I've been advised that there will be redundancies," Brian Lee, group general manager, managed services told ZDNet.com.au. The job losses were to come from the ranks of Commander in CSG's Canberra office, he said.
Lee said the firm was keeping around 80 former Commander staff, however, around 100 were likely to lose their jobs because CSG had been unable to retain some contracts acquired from Commander last year. CSG reported at the time it had $60 million worth of Commander contracts for an undisclosed sum.
Lee said he hoped the companies who were taking over the contracts would absorb some of the headcount. "Unfortunately that's outside our control. We've tried as hard as we can ... but it really is dependent on the other service providers," he said.
A number of those contracts it had acquired were already out to tender prior to CSG overtaking them, said Lee, which meant it was unable to bid for the work.
"Whilst we would have liked to have retained all of these contracts, the process was beyond our control," he said. "CSG was well aware of this at the time of the acquisition and alerted the market to the possibility that, in the short term, some of these contracts may not remain with CSG."
The Department of Agriculture, Fisheries and Forestry (DAFF) was one of the departments to move, replacing CSG with the now HP-owned EDS earlier this year.
Despite the contract losses, the acquisition was still worth it, said Lee, because it gave CSG a foothold in the Canberra market.
CSG only contracted these staff to fulfill the Commander deals over the life of the deals - nine to twelve months. So it it fair to say they are being 'laid off'?