Managed services pusher Ensono is to chop 137 employees across its UK and US global support desk and technology teams to reduce costs, and has said that hiring in India is a key element of delivering services.
The trimming equates to a little over 6 per cent of the global workforce, though only staff in America and Britain are affected.
In a 19 February memo to workers – along with an FAQ note – Ensono CEO Jeff Von Deylen confirmed the MSP is "eliminating 85 roles" stateside and 52 in the UK via "redundancy", albeit subject to consultation or redeployment.
The layoffs, he said, "primarily involve" the global help desk operating in the UK, or what is known internally as the Monitoring & Management Centre (MMC), and managed infrastructure services (MIS) positions in the US.
Ensono's MIS includes data storage, backup services and disaster recovery on distributed or x86 platforms.
Von Deylen said privately owned Ensono has doubled in turnover since 2016 – the company confirmed to us it generated revenues of $600m in 2019.
It employs circa 2,250 worldwide with 1,200 in the US, 497 in Europe (320 in the UK and the rest in Germany and Poland) and more than 500 in India: Ensono paid $405m in 2018 for Wipro's hosted data centre services biz.
"Ensono continues to grow at a rapid pace in a multi-billion dollar industry," the FAQ states. "However, we are entering a new tier of the market that requires us to manage our business differently to compete with providers who have a lower cost structure.
"We need to think differently, and that includes re-evaluating how we distribute work regionally. While we did grow revenue in 2019, churn in our infrastructure (MIS) business impacted profitability and staffing needs. In short, current costs are causing EBITDA to remain flat and we need to operate more efficiently."
MIS revenues shrank by $40m in the last two years with a "large proportion" happening in the UK and a decline forecast in the US for 2020 "putting added pressure on margins and pricing", the FAQ revealed.
Von Deylen said the decision to cut jobs is "always a very difficult one" and "not made lightly". More positions are becoming available in the "growth areas" of managed mainframe and public cloud, he added.
"We expect that this will be the last such scale change of this type for the foreseeable future," he said. However, the FAQ ominously warns that "at this time" there are no further plans to make further reductions.
The business told us it is pursuing a global "follow the sun model" across its portfolio. Like other services providers, it is seeking a lower-cost labour force in certain parts of the world. IBM, for example, has more than 100,000 staff based in India.
The FAQ asked: "Why are we increasing jobs in India and other parts of the business?" Answering its own question, it said Ensono had started out as an MSP based largely in the US but had since expanded to the four other countries.
"We have a significant presence in the US and the UK today, and that will not change. Growing our operations in India and Poland is an important part of our staffing model, enabling us to deliver 24/7 client support.
"We are hiring various roles in all parts of the business and in different regions, particularly in India, to build out our technology expertise and to deliver 24/7 client support."
Staff in the UK who do not find another position in the business are scheduled to leave by 31 March. Such are the employment laws in the US that those affected have already gone.
El Reg sends its best wishes to all of those caught up in this round. ®