Worldwide slump hits Synergy

The worldwide slump in demand for IT services has hit home with Wellington-based IT consultancy Synergy laying off staff at its Auckland office.

According to chief executive David Irving between eight and 12 staff will be laid off with "a handful" more not being replaced after they've left.

"We had budgeted to grow by 25% this year and while July and August were okay, September stopped us in our tracks," says Irving. While the company still grew substantially, by 15%, he says staff had been employed earlier in the year in anticipation of more revenue.

"They're mostly corporative administration staff," says Irving who spent part of last week in Auckland to discuss the matter with staff.

Synergy is still taking on staff in other areas, such as Java development and network services.

Irving says one growth area of the business is its UK operation, started last year after the closure of its Australian office.

"In some ways it's easier to do business in the UK or Singapore than in Australia," says Irving. Synergy doesn't have an office in Singapore, but does have a contingent working there currently.

The layoffs won't affect Synergy's joint venture with Swedish telecommunications firm Ericsson, set up last year. The venture aims to develop "world-leading mobile internet applications" in New Zealand and is staffed separately to Synergy's Wellington office.

Synergy employs around 230 people in total.

According to the New Zealand Herald Auckland-based ISP Ihug has laid off 10 staff, but like Synergy is continuing to hire in other areas.

Unisys New Zealand has also laid off around 30 staff, but is keeping its overall tally static at about 600 through new employees in other areas of the business.