The Hindu Business Line : Logica expanding Chennai operations

Chennai, Sept. 18 Logica, the UK-based information technology and business service provider, plans to add around 1,300 employees in the next 18 months for its new software delivery centre in Chennai. It currently has 200 employees working in the city.

The new centre at the DLF IT Park is part of Logica’s plan to double employee strength in India to 8,000 by 2009-end. “While expansion in Europe will be flat, the employee addition will happen in India,” said Mr Andy Green, Global Chief Executive, Logica.

The new centre will support Logica’s future offshore growth providing services in the areas of business process outsourcing, remote infrastructure management and application services, he told newspersons.

Logica has earmarked £8 million to accelerate its ‘blended delivery’ that combines local presence in Europe with the use of offshore resources in India. This gives customers the benefit from a mix of expertise, availability of good talent and cost competitiveness, he said.

The expansion in Chennai follows the launch of Spark Innovation Centre in Bangalore by Logica on Monday. This is the second such innovation centre (the first one was launched in May in Lisbon, Portugal) to focus on mobility solutions.

‘No retrenchment’

“There will be no retrenchment in India due to the company’s recent restructuring programme,” Mr Green told Business Line. The major sources of savings from the restructuring will arise from streamlining the organisation structure, transitioning activities offshore, reducing property costs, rationalising IT and back-office functions and procurement savings.

As part of this plan, Logica will make around 1,300 [employee] redundancies — or 15 per cent of its 39,000 global workforce. “The retrenchment will be only in Europe and not in India where we are expanding,” he said.

On the growing threat from Indian companies, Mr Green said Europe is a difficult market to penetrate due to issues such as regulations and languages. “You need to understand the market thoroughly before venturing into Europe. “As we are coming to India, companies from here are going to Europe. Let’s see who wins.”

Demand in Europe

According to Mr Green, business in Europe is good. The declining working population every year is forcing companies to automate, and also look at outsourcing and offshoring. While cost is not an issue, it is the ability to manage work offshore. The key is to have a good team, he said.

In 2007, 95 per cent of Logica’s £3 billion revenues were from Europe. “Our focus will remain Europe,” he said.

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