Dixons to outsource IT in £30m cost-cutting drive

Dixons Group is in "advanced" negotiations with an IT supplier - believed to be LogicaCMG - over plans to outsource its UK IT operations as part of a company-wide £30m cost-cutting drive.

The group, which includes UK high-street brands Currys, Dixons, the Link and PC World, confirmed the plans in its interim financial report this week.

John Clare, group CEO of Dixons, cited a "challenging" trading environment in the UK over the next year and said plans for a scaled down corporate centre are anticipated to yield savings of £30m in 2005/2006 with further savings in the following financial year.

Part of that plan is the outsourcing of the internal IT operations of the UK business, which support the head office and high-street store systems. Around 250 UK IT staff will be affected by the move although no decisions have yet been made on redundancy or transfer.

A spokesman for Dixon's Group refused to confirm reports that LogicaCMG is set to win the deal but told silicon.com the talks are at an "advanced stage" with one IT supplier.

Dixons will also be changing its corporate name to DSG International to reflect the group's international reach.