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Logica has surprised no one by announcing that it will cut between four and five per cent of its staff in response to the "worsening economic environment".

We revealed last month how Logica had sent an internal email which effectively cancelled Christmas for all its staff to cut costs. The company declined to comment on possible job cuts. Two weeks later, it banned stamps.

However, despite the fact that the company posted a 60 per cent rise in profits at the start of September and that its chief exec, Martin Read, is the UK's highest paid director, earning a staggering £27.3 million last year, the company non-exec chairman Sir Frank Barlow said at its agm that it "expects to reduce group staff numbers by about 4 to 5 per cent over the next few months".

It's not all bad news though. Sir Frank said: "Overall, in the first quarter, we achieved order intake growth well in excess of 20 per cent with continuing good operating margins. Our mobile networks business grew revenues by 37 per cent with improving margins. Our expectation is that we will be able to deliver profits in the first half consistent with the normal seasonal pattern. As we look forward, our order intake, current prospect pipeline and strong operational controls give the board confidence that we are on track to deliver strong financial performance as outlined in our preliminary announcement." ®

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