RM Education to cut 300 jobs and exit PC market

school kids

Schools ICT supplier RM Education is winding up its PC business and has set out plans to cut around 300 jobs over the next 12 months.

The Oxfordshire-based firm said the decision was based on the outcome of a financial performance review of its Education Technology (ET) business, which has been hit hard by the decision to axe the Building Schools for the Future (BSF) programme.

"RM has now completed the review of ET and has concluded that the future focus of this division will be on expanding its existing software and services offering," the company said in a statement.

"In addition to the previously indicated reduction of the c.40 million in revenues associated with the conclusion of the Building Schools for the Future (BSF) projects, the division will exit the declining and low margin sale of personal computing devices.

"A significant reduction will also be made in the scale of the divisions associated sales and marketing activities and in central services functions," it added.

The move is likely to result in around 300 of the firm's UK staff losing their jobs over the next 12 months, and RM has already embarked on a consultation with those likely to be affected.

"Existing contractual commitments to provide personal computing devices will be fulfilled and the division will continue to provide third party infrastructure hardware as part of its services business," the statement added.

The Government called time on the 55 billion BSF scheme in July 2010, resulting in more than 700 school refurbishment projects being shelved.

The decision was challenged by six local councils, who had shelled out millions of pounds in abortive refurbishment projects before BSF was culled, in the High Court in early 2011.

The judge presiding over the case sided with the councils, ruling Education Secretary Michael Gove had acted unlawfully by failing to carry out a full consultation before pressing ahead with ending the programme.

RM said the reduction in BSF activity, coupled with its exit from the PC building business, will result in a 50 per cent reduction in the ET division's revenue over the next two financial years, as well as a further one-off 10 million charge.

Simon Harbridge, CEO of fellow education-focused ICT supplier Stone Group, said the academic market remails a challenging place, but there are a few bright spots.

"The education market remains dynamic and is still our biggest market with increased activity and net new business from Academies and Free Schools. Additionally, with changes to the curriculum in 2014, there will be greater emphasis on computing within education and in turn, a greater need for advanced PC equipment," said Harbridge.

Caroline Donnelly is the news and analysis editor of IT Pro and its sister site Cloud Pro, and covers general news, as well as the storage, security, public sector, cloud and Microsoft beats. Caroline has been a member of the IT Pro/Cloud Pro team since March 2012, and has previously worked as a reporter at several B2B publications, including UK channel magazine CRN, and as features writer for local weekly newspaper, The Slough and Windsor Observer. She studied Medical Biochemistry at the University of Leicester and completed a Postgraduate Diploma in Magazine Journalism at PMA Training in 2006.