NCC Group to cut more than 100 jobs following slowdown in trade
>
NCC Group to cut more than 100 jobs as tech sector slowdown rocks FTSE 250 cybersecurity business
- NCC Group stated that approximately 7% of its workforce would be laid off
- It has also noticed that its sales cycle has lengthened since the beginning of December
- Meta and Microsoft are among the tech giants that recently announced jobs
Cybersecurity firm NCC Group has revealed it will make a significant number of layoffs as technology companies continue to struggle in a challenging market.
The Manchester-based company told investors that 7 per cent of its estimated 1,800 staff would lose their jobs, with the UK and North America making most of the cuts, at a one-off cost of £4 million.
Due to a weaker market environment, the FTSE 250 company said low turnover and capacity utilization has led to much “higher than planned” headcount.
Layoffs: Cybersecurity firm NCC Group stated that 7 percent of its workforce would lose their jobs, with most of the reductions taking place in the UK and North America
The sales cycle has also lengthened since the beginning of December, delaying sales recognition, particularly in the UK and North America, purchasing decisions and commencement of work.
As a result, it expects sales for the full year to grow by only single digits, alongside an adjusted operating profit of around £52m.
NCC’s trade update comes amid an avalanche of job cuts in the global tech sector as easing of pandemic restrictions and interest rate hikes led to a slowdown in growth.
Tech giants that have announced a workforce reduction in recent months include Google’s parent company Alphabet, Amazon, Microsoft, Facebook owner Meta and cloud-based software designer Salesforce.
NCC Group shares fell 18 per cent on Thursday morning before recovering to finish just 4.45 per cent lower at 176.2p, though it was still the second biggest faller on the FTSE 350 Index.
Despite the poor share price performance, the company published solid first-half results showing sales up 10.2 per cent at constant exchange rates to £176.6 million for the six months ended November.
Trading was boosted by stronger demand for global professional services in the insurance division and contract renewals related to an intellectual property management arm purchased from data company Iron Mountain in 2021.
Profits rose by almost a third to £7.6m, even as margins were hit by higher overhead costs and the organization of face-to-face global conferences for the first time in three years.
In addition to the results, NCC revealed that it is plowing ahead with the next phase of its strategy, which will focus on acquiring customers in booming industries that are vulnerable to cyber risk.
“Despite the very clear global economic headwinds, we are confident that the next chapter of our strategy will deliver a company that is positioned to take full advantage of increasingly complex cyber challenges, and one that will be resilient in dynamic markets,” said CEO Mike Madison.
He added: ‘Our strategy…will deliver enhanced medium-term growth with a customer-centric go-to-market model, market-leading capabilities and broader end-to-end offerings, efficiencies through global delivery and differentiated brands. ‘
NCC was founded in June 1999 following the acquisition of the commercial divisions of the National Computing Center by the management team and private equity house ECI Ventures.
After being listed in the junior AIM market five years later, the group began focusing on expansion through a series of acquisitions of companies involved in cybersecurity, software escrow and testing services.