CSC is about to announce massive job losses among staff working on its NHS account.
The move strongly suggests that the company is unlikely to win an advantageous new deal for the North, Midlands and East of England; or any deal at all.
However, in a statement confirming the news broken by eHealth Insider this afternoon, the company said "the action is mainly because we have now substantially completed many key development activities and are moving away from a focus on development work.
"This action is independent of contract negotiations. These are onlgoing and we are therefore unable to comment on them."
EHI has been told that the company called an emergency meeting for staff this afternoon to announce that it is planning to make up to 500 people working on the NHS account redundant from a total of 1,700.
A CSC employee, who asked to remain anonymous, said they were told the company was looking to make 460 CSC staff redundant and to lose 40 from iSoft, which CSC acquired last year.
“Obviously people are a bit confused as to the reason why they bought iSoft for (£117m) last year only to be hit by redundancies this year,” he said. “We didn’t see it coming.”
CSC is now entering a 90-day consultation process with employees. In its statement, it said that "through voluntary redundancies and redeploying people within other parts of our business, we hope to achieve a significant reduction without the need for compulsory redundancies.
"Where this is not possible, we will provide support to help ensure that anyone leaving the business does so in the best possible position."
The US company has been struggling to deliver the Lorenzo electronic patient record, originally developed by iSoft, to the NME.
Christine Connelly, the former director general of NHS informatics, set the company a target of getting the system live at four, key early adopter sites by last spring.
But it missed when the fourth early adopter - and first mental health adopter - Pennine Care NHS Foundation Trust dropped out and went on to lead its own procurement for a new IT system.
The company was initially convinced it would still get a new memorandum of understanding for its LSP deal. But a series of critical watchdog, Parliamentary and ministerial reports on the progress of NPfIT and Lorenzo in particular cast this into doubt.
CSC told American investors over Christmas that it might not get a new deal on terms advantageous to the company, or any deal at all, and said it would take a £1 billion "impairment" as a result.
EHI was told earlier in the Autumn that CSC might not get a new deal, and that it would scale back its UK activity and staff if it did not.
In its statement, the company concluded: "CSC remains fully committed to healthcare globally and in the UK in particular.
"We are confident that these carefully targeted and managed reductions will not impact the overall quality of service we provide to our existing NHS customers.
"We currently have about 97,000 employees globally – about 1,700 of these are within our UK healthcare business."
This story was first published at 5pm on Thursday, 2 February, and updated after CSC issued a statement to EHI at 8pm.
© 2012 EHealth Media.
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