Sage cuts jobs

Accountancy software firm Sage today said it had cut 700 jobs since October as part of a major crackdown on costs to weather recession.

The group said 200 jobs had gone in the UK under the plans, which involve around 5% of its 14,500-strong global workforce.

Sage is based in Newcastle but also has major sites in Manchester and Winnersh, Berkshire, with 23 UK offices overall.

The cost-cutting plans will deliver £49.3m (€55.75m) in annualised savings, the firm said – around 4% of its cost base last year.

The news came as the group moved to soothe fears over sliding revenues after booking a 14% rise in first-half profits and “resilient” trading.

Sage was among the FTSE 100 Index’s top performers despite the impact of the recession on underlying revenues, which shrank 4%.

Software sales were down 15% although this was partially offset by growth in subscription revenues, such as support services to customers.

But the firm – whose Line 50 product is among its best-known UK software - added that renewal rates for support contracts were steady at 81%.

Pre-tax profits were up to £139.2m (€157.3m) in the six months to March 31, although stripping out the impact of the weaker pound and restructuring costs gave a 3% rise.

Chief executive Paul Walker said: “After a robust performance last year, we are now experiencing the effects of the weakening global economy in most of our markets, with customers delaying software purchasing decisions.

“However, demand for high-quality customer support remains strong.”