NCC Group to cut more than 100 jobs as tech sector slowdown rocks FTSE 250 cybersecurity business
- NCC Group declared that around 7% of its workforce would be made redundant
- It has also observed its sales cycle become longer since the start of December
- Meta and Microsoft are among tech giants to have recently announced job cuts
Cybersecurity business NCC Group has revealed it will make a significant number of redundancies as tech firms continue to struggle in a challenging market.
The Manchester-based firm told investors that 7 per cent of its estimated 1,800-strong workforce would lose their jobs, with most of the cuts happening in the UK and North America, at a one-off cost of £4million.
Due to a weaker market backdrop, the FTSE 250 company said its low attrition and utilisation rates have resulted in much ‘higher than planned’ personnel levels.
Redundancy: Cybersecurity business NCC Group declared that 7 per cent of its workforce would lose their jobs, with most of the reductions happening in the UK and North America
Its sales cycle has also become longer since the beginning of December, causing delays to revenue recognition, particularly in Britain and North America, buying decisions and work commencement.
Consequently, it expects full-year turnover to only rise by a single-digit percentage figure, alongside an adjusted operating profit of approximately £52million.
NCC’s trading update comes amid an avalanche of job losses across the global technology sector as loosening pandemic restrictions and interest rate hikes led to a slowdown in growth.
Tech giants who have announced slimming headcounts in recent months include Google’s parent company Alphabet, Amazon, Microsoft, Facebook owner Meta and cloud-based software designer Salesforce.
NCC Group shares slumped by 18 per cent on Thursday morning before recovering to end just 4.45 per cent lower at 176.2p, although it was still the second-biggest faller on the FTSE 350 Index.
In spite of the poor share price performance, the business published solid first-half results showing revenue increased by 10.2 per cent at constant currency rates to £176.6million for the six months ending November.
Trading was lifted by more robust demand for global professional services in its assurance division and contract renewals related to an intellectual property management arm bought in 2021 from data firm Iron Mountain.
Profits soared by almost a third to £7.6million even as margins were hit by higher overhead costs and the staging of its in-person global conferences for the first time in three years.
Alongside the results, NCC revealed that it was ploughing ahead with the next phase of its strategy, which will focus on gaining clients in thriving industries vulnerable to cyber risks.
‘Despite the very evident global economic headwinds, we are confident that the next chapter of our strategy will deliver a business positioned to fully capitalise on increasingly complex cyber challenges, and one that will be resilient in dynamic markets,’ said chief executive Mike Maddison.
He added: ‘Our strategy…will deliver enhanced growth in the medium term with a client-centric go-to-market model, market-leading capabilities & broader end-to-end offerings, efficiencies through global delivery and differentiated brands.’
NCC was founded in June 1999 following the acquisition of the National Computing Centre’s commercial divisions by its management team and private equity house ECI Ventures.
After listing on the junior AIM market five years later, the group started focusing on expanding through a series of takeovers of firms involved in cybersecurity, software escrow and testing services.
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