Affecto streamlines its operations in Baltic countries
Affecto Plc has decided to streamline its business activities in the Baltic countries. The Baltic economies have developed weakly during the economic crisis. The IT investments from the public sector are expected to decrease due to government cost saving programs. Affecto's business in the Baltic countries has developed weakly in 2009 and has been clearly unprofitable.
Affecto's goal is to reduce the personnel in Baltic countries by some 130 i.e. by approx. one third of employees in Baltic. The business in Latvia and Poland will be cut significantly, and to some extent also in Lithuania.
The actions are estimated to cause approx. 1.7 MEUR costs. The final costs will become clear during the process. In addition, the book-value of the Baltic operations will be subject to a write-down of approx. 6.2 MEUR. The estimated costs will be recognized in the first quarter results. The actions are estimated to generate savings of approx. 3.8 MEUR annually in personnel cost.
Affecto's business in the Nordic countries has developed reasonably well taking the current business conditions into account, and the currently planned actions are not targeting the Nordic countries.
"The IT service market in the Baltic countries has developed very weakly in early 2009, and we do not believe that the market will recover very quickly. We do not find it reasonable to maintain the local delivery capacity at previous level, so we are adjusting it to the current business conditions", says Affecto's CEO Pekka Eloholma.
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