IT Services provider WM-data AB said that demand for new projects in its native Nordic region continued to decline during the third quarter, and announced further cost-cutting measures.
In the nine months to September 30, 2002, the Stockholm, Sweden-based company made a pre-tax loss of SEK 597m ($66.3m) compared to a loss of SEK 81m ($9m) in the year-ago period. Revenue fell by 47% to SEK 5.2bn ($577m), which was due in part to the disposal of several non-profitable parts of the business. The company’s headcount fell by 11% to 6,850 during the first nine months of the year.
Chief executive Crister Stjernfelt said that there was an overcapacity in ERP services and weak demand for hardware and consulting services in Denmark, and that spending remained slow from telecoms and financial services companies in Sweden. The company is experiencing fierce competition and pricing pressure in Norway.
In reaction to the health of the market, Stjernfelt said that the company plans to cut 400 staff, mostly at its Swedish operation, at a cost of SEK 125m ($13.9m). The company has already shut down its 80-strong WM-data Knowledge division during the third quarter. It now expects to make a full-year net loss compared to the break-even it achieved in full-year 2001.