news As you might have read, yesterday Victorian IT shared services agency CenITex told its staff that it was planning a round of 200 redundancies. Thanks to a source, we’ve gotten our hands on the internal document outlining the changes. You can read CenITex chief executive Michael Vanderheide’s message to staff on the cuts below.
We’re not surprised by the fact that these kinds of cuts are happening at CenITex. You can find some more background on the issues which the agency is suffering here. There is also some information here on what Vanderheide is referring to when he says “Efficient Technology Services”. In our opinion, this is just more evidence that Australia’s IT shared services paradigm is dead and should be eliminated, at least when it comes to state governments.
As I’ve indicated over the past couple of months in my weekly updates, we’ve been working through our response to some very difficult budget challenges for the coming financial year.
With our departmental customers reprioritising based on their budgets for next year, our revenue for projects is likely to drop and revenue associated with core services is also at risk of decreasing given some of our charges are desktop based and therefore sensitive to reductions in customer staffing numbers. Coupled with this, there has been a pause in further funding for Efficient Technology Services (ETS) program and the timing and amount of related work is uncertain. While many ETS initiatives are delivering benefits, some of the internal efficiencies we had budgeted for have not yet materialised or are happening more slowly than planned. As well, some of our costs are increasing (or will increase next year) and our customers are not in a position to manage price rises due to their internal budget pressures.
Therefore, the coming year for CenITex will be one of consolidation. We will focus very heavily on delivering customer funded projects and the provision of core services and to this end, I have made several difficult decisions:
1. Resources associated with ETS as a defined program within CenITex will be wound down before 30 June. Some of the work that is scheduled to deliver an outcome by the end of June will be completed, some initiatives will be stopped and others will be transitioned into Projects & Architecture or Service Operations, particularly where customer funding is available.
2. Budgets for internally funded improvement initiatives will be reduced significantly and these programs (including One Service Operations, One Project, Project Unite and others) are being reviewed. We expect some will be put on hold for 12 months and others will continue with a greatly reduced scope.
3. In addition to the reduction of resources associated with the ETS program, we propose to cease functions and/or change work practices to enable a further reduction in positions across the wider organisation. As our customers would expect, we will look to make these changes in ways that minimise the effect on core service delivery. So, while reductions will be felt across the organisation, the impact of changes will be greater in our corporate services than elsewhere.
Where possible, we propose to remove unfilled positions, manage reductions through natural attrition, and look to reduce our contract and fixed term workforce. I also expect some redundancies will be necessary. In all, I expect that approximately 200 people across CenITex will be affected. Resources associated with the ETS program represent about half of this total and, while they will always feature as an important part of our workforce, the significant majority of positions affected overall will be held by contractors and staff on fixed term arrangements. Final numbers and the positions affected will not be known until we complete the consultation process.
The Community and Public Sector Union (CPSU) is being briefed on our proposal to achieve our reductions and your senior manager will be meeting with you over the next few days, individually and in
teams, to outline the areas where we propose to make changes and our proposed approach. This will begin our consultation phase before final decisions are made. I will also be running my Live Online Chat session each week for the next few weeks to help answer your questions.
I know this is not easy news, particularly for an organisation as young as ours. But while I understand this will be hard, based on what I’ve seen in my time with you, I believe we’re up to it.