ICL has shocked staff by calling for up to 2000 voluntary redundancies in the UK, with the threat of compulsory layoffs if the target is not met.
The firm said the decision has been taken because of disappointing business results against the backdrop of adverse market conditions affecting the IT industry as a whole.
The cuts could account for up to 18 per cent of ICL's 11,500 UK workforce and are nearly six times the 330 job losses feared when the firm announced staff reductions in August.
In a message sent to employees the company said that, while some parts of the business were doing well, others had declined and that additional cost-cutting measures were still needed.
All 11,500 staff have been given 90 days' redundancy notice. Effectively they have until 11 January to apply for voluntary redundancy, suggesting that the firm is expecting to have to make compulsory layoffs.
Parent company Fujitsu has consistently cut back costs at the firm over the last two years as results failed to meet expectations.
Fujitsu decided this summer that the ICL brand, one of the UK's oldest, would be phased out by March 2002.
In February, chief executive Richard Christou said that the performance of the company's software and professional services division had been disappointing.
Previously, ICL has dropped contractors and temporary workers, cut back on recruitment and clamped down on spending.
The reductions will apply across the group in the UK and are expected to be completed by March 2002.
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