By Peter Judge, 12 June 2006 09:10
NEWS
Software developer iSoft is laying off 10 per cent of its staff and revising its accounts, in the wake of troubles with the multi-billion pound upgrade of the NHS IT system.
The restated accounts, which effectively reduced iSoft's recent profits to zero and sharply cut future expectations, have "thrown the future of the company into question," according to The Independent newspaper, and pushed it into renegotiation with its banks.
Tola Sargeant an analyst at Ovum said: "This is the latest in a string of negative announcements from iSoft ahead of its FY 2006 results. iSoft's share price is at another all-time low, as is confidence in the management team among investors."
iSoft, founded in 1994 by KPMG and once tipped as a UK success story, has lost 87 per cent of its market value this year and announced a profit warning in January. The company is providing software for the NHS National Programme for IT (NPfIT), an IT upgrade project that has been beset by delays and cost Accenture £260m.
Sargeant said: "The redundancies in the UK are also worrying. While the company clearly has to cut costs, iSoft, which is already stretched, will need as many good people as possible to help get its NPfIT implementations back on track."
iSoft is renegotiating its contract terms with the NHS and financial matters with the banks. Sargeant said: "Both of these discussions could have make or break consequences for the company. In the meantime, iSoft is looking more and more like a potential acquisition target."
Peter Judge writes for ZDNet UK
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