CEO and president Arne Jensen told ComputerWire: We currently have around 2,600 employees, and this will be reduced by 5% predominantly in back-office functions and areas where we duplicate operations. This could not be done if we continued to operate separately.

At the same time, Oslo, Norway-based Merkantildata said that the Ementor consulting and Eterra reselling arms would be merged together, and the company would then take on the name of Ementor by July 1. Jensen said: We haven’t been invoicing under the name Merkantildata for over two years now since it was only a holding company. It was a good brand in the 90s until the market crashed. Analysts would ask me ‘why don’t you get rid of the Merkantilidata name?’

Following the move, Merkantildata will disappear and the business will comprise four divisions, including Ementor Norge AS, Ementor Danmark AS, Ementor Sverige AS, and Ementor Finland Oy corresponding to its presence in the Nordic markets of Norway, Denmark, Sweden and Finland, where it will employ just under 2,500 people.

The decision to rebrand the business away from reselling toward higher margin consulting services has followed a tough trading climate for Merkantildata. During the fourth quarter period ended December 31, 2002, the company made a net loss of NOK 707.5m ($99.1m) compared to a net loss of NOK 681.2m ($93.9m) in 2001, on revenue that fell 18.3% to NOK 1.44bn ($201.6m). Ironically, Ementor was the worst performing operation, with revenue declining 29.8% to NOK 140.1m ($19.6m), and Eterra declined 16.7% to NOK 1.3bn ($182m).

Following the restructuring, Jensen hopes to make annual cost savings of NOK 100m ($14m). However, the costs involved are expected to be NOK 150m ($21m), which the company plans to account for in the second quarter. Jensen will continue to be CEO, Gottfred Langseth will continue as CFO, and Eterra’s MD Steinar Sonsteby will take on the role of COO. However, Ementor’s MD Lars-Erik Johannsessen will be replaced in the new management structure by senior VP Ole Morten Settevik, who will become CTO.

Source: Computerwire