Computer Associates New Zealand is unlikely to follow the lead of its Australian counterpart who said this week that it would axe up to 30 jobs as it strips down operational costs.
Paul Wallace director of operations at CA New Zealand says the company is not under pressure to cut costs here as it has focussed heavily on ensuring its profitability over recent years.
“A lot of the hard work has been done previously and we now have good cashflow,” he says.
The review in Australia comes as part of a company-wide effort to reduce its headcount by 800 worldwide and operating costs by US$70 million, following an agreement with US Federal prosecutors to restitute $US225 million back to shareholders in the wake the company’s accounting fraud scandal.
Expatriate New Zealander Stephen Richards, who was formerly global sales director at CA in US and ran the New Zealand operation in the early 1990s, as well as former CA CEO Sanjay Kumar have been indicted on fraud and obstruction of justice charges.
CA Australia managing director Gavin Selkirk confirmed that cuts were on the way, saying the operation is undertaking a wide-ranging internal review in a move to minimise both operational costs and discretionary expenditure. Selkirk told Computerworld Australia that while it was too early to give specific numbers about how many Australian positions would go, he could not rule out that it could be as many as 30.
In terms of how the cost shedding exercise will translate across the globe, Selkirk said 70% of reductions would come out of North America and 30% from its international operations.
CA employs 600 people in Australia, 25 in New Zealand and cited a worldwide headcount of 15,300 employees in March 2004.
Wallace meanwhile says no special review is underway in New Zealand, but adds the company reviews its operations continuously.
He adds CA New Zealand showed a profit of around $300,000 for its financial year that ended on March 31, 2004. The company’s financial statements have been filed with the Companies Office, but are not available for viewing yet.
As Wallace has not yet seen a list of Australian jobs affected, he cannot say if the cuts will impact on marketing activities in New Zealand that are directed from Australia.
CA’s marketing department in Australia is organised in teams that are responsible for marketing campaigns for specific products in both countries, but Wallace says New Zealand now relies less on Australia for marketing as it has taken on more activities over the last year.
Wallace says he is not aware of any local customers expressing concerns over the accounting scandal.