Fujitsu has told staff it will no longer seek new business in its Republic of Ireland operation and will instead focus on fulfilling existing contracts.
In an internal email, UK and Ireland boss Anwen Owen said the decision followed a review of the business performance and outlook in Ireland. Staff in Ireland will be affected.
“It is with regret that we have taken a difficult decision and plan not to pursue new business in the Irish office,” the email stated. “Going forward, Fujitsu plans to refocus its Irish operations on the fulfilment of existing customer contractual commitments.”
The Japanese supplier is embroiled in a huge controversy in the UK, due to its role in the Post Office Horizon scandal.
One insider, who wished to remain anonymous, told Computer Weekly that morale is low in the UK business and some job cuts have recently been announced.
The source added that the supplier was closing a Manchester operation, although when asked, the Fujitsu public relations spokesman said this was not the case. “Fujitsu is consolidating its Manchester-based employees into refurbished space within a building it currently leases,” the spokesperson said. This will involve more people working from home.
With the imminent end of the huge Post Office contract to supply the Horizon system approaching and uncertainty over future government contracts, Fujitsu’s future in the UK is being questioned. The supplier has put all of its UK public sector bidding on hold while the statutory public inquiry into the Post Office scandal goes about its work.
IT services companies are primed to sweep up UK public sector business if Fujitsu’s huge share of the sector declines amid fury over its role in the Post Office scandal.
In the 1990s, it took over British computer company ICL, which had significant contracts with the government, including with the Post Office. The lure of the huge Post Office contract was an incentive for Fujitsu to take over ICL.
Despite its involvement in the scandal, Fujitsu has continued to gain lucrative contracts with the UK government. Last year, it was awarded IT services contracts by the Home Office, HM Revenue & Customs (HMRC) and the Foreign, Commonwealth & Development Office (FCDO).
Fujitsu will be paid £250m by HMRC to replace an in-house service, the FCDO has contracted it to provide networking and communications services in a deal worth £184m, and the Home Office is paying it £48m to support the technology underpinning the Police National Database.
According to figures from Tussell, Fujitsu has active contracts with the UK government and public sector worth over £4bn. The biggest of these, worth nearly £2.4bn, is its deal to supply and support the Post Office’s Horizon system. This contract is being phased out with the Post Office’s ongoing project to replace the controversial system.
The supplier also faces a huge bill to pay its share of the costs of the Horizon scandal, amounting to well over £1bn, which UK taxpayers are currently footing.
Mark Lewis, expert IT services lawyer and senior consultant at Stephenson Harwood, said: “This could be part of a strategy to rationalise its European business, or it could be in anticipation of the impact of its role in the Post Office scandal. We will have to wait and see.”