ASX-listed telco supplier to wind up Aussie subsidiary

Sydney-based Clarity OSS will cut more than 20 percent of its staff as it strives to return to profitability.

The vendor, which supplies operations support systems for networking and asset management to telcos, will make 40 staff redundant from its Sydney-based global head office, bringing its headcount down to 145.

According to a statement, the board has "proposed to implement the restructure by voluntarily winding up it Australian resources subsidiary".

Chief executive Jon Newbery said the redundancies were purely a financial decision.  "We're supporting them where we can when it comes to giving them new opportunities.

According to the company, the reductions were "across the back office and research and development capability" of Clarity.

Newbery said the redundancies would result in a saving of $4 million a year.

The redundancies are part of Clarity's Australian restructuring efforts to "substantially reduce costs", blamed on the cost of doing business in Australia.

Clarity grew revenues from $32.6 million to $39.4 million for the 2013 financial year, but saw profits fall from $3 million to a $4.7 million loss.

The company declared a loss of $4.5 million on sales revenue of $39.4 million for the financial year ending 30 June 2013. Expenses increased from $32.2 million in 2012 to $42 million.

Clarity's balance for the period sits at a loss of $12.8 million.

Newbery said the increase in expenses are from "a couple of delayed projects and have caused some challenges in unwinding them".

He didn't clarify which projects specifically. Clarity provides operations support systems to telcos, with recent deals including a win in May with Kiwi broadband provider NZ Ultrafast Fibre as part of a consortium with Datacom.

Other international customers include Globe Telecom in the Philippines, Sri Lanka Telecom and Telkon Indonesia Flexi.

In November 2012, Clarity was named on Gartner's Magic Quadrant for operations support systems.

Newbery told CRN he was proud of Clarity's Australian heritage but that being based in Australia "presents more challenges than opportunities".

The company has just one customer in Australia, government-owned Western Power. "We're growing the business around the Asia Pacific where we see opportunity," Newberry added.

He said local partners include Tata Consulting Services and Tech Mahindra.

Clarity has seven additional offices located throughout the Asia Pacific and Europe. The company has 35 Telecom customers worldwide, managing 500 million customers.