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By | Paul Kunert 8th February 2013 17:27

Atomic Weapons Establishment ditches 2e2 in funding row

Not riding this bomb down

Stricken integrator 2e2's administrator has confirmed in a letter to staff that the Atomic Weapons Establishment, one of its data centre customers, walked after it was asked to pay thousands of pounds to keep the server farm up and running.

FTI Consulting, hauled in to take charge of 2e2 late January, told remaining staff at the integrator today it is shopping the data centre biz around the market and has some potential buyers

It said that conversations with the largest customers, who were told to cough £40,000 each by the end of next week if they want to see their data again, were "generally" well received.

Smaller customers were told to stump up £4,000 and FTI said these negotiations were "ongoing".

It confirmed employees working on the Bank of England and Raytheon data centre services contracts were retained as they are "meeting the costs of the employees" and an "orderly transition" of data can be achieved and employees transferred.

"Unfortunately AWE cancelled their contract yesterday. The administrators do not know what replacement arrangements AWE have reached but employees may wish to seek further guidance as to the possibility of their employment transferring to AWE or AWE's new supplier under TUPE," said FTI.

Yesterday FTI warned it could take up to 16 weeks for all data to be transitioned to the next data centre provider. With a number of public sector customers on board, this could prove problematic as the government's next fiscal year starts fairly soon.

Since its appointment, FTI tried and failed to offload 2e2's UK subs - the international subs in the US, the Netherland, Channel Islands, Ireland and Spain remain unaffected by administration and negotiations with prospective buyers are taking place.

As of 6 January, FTI had got rid of nearly nearly 1,000 staff as it was unable to sustain trading losses, which it confirmed today were significant.

"After nine days in administration, the company could no longer fund the employe wage bill and other accosted costs…trading losses at the time amounted to circa £300,000 per day," FTI stated in the letter.

People remaining in the business include managed services staff transferring to O2, folk working on the BoE and Raytheon contracts and data centre specific staff.

The standalone security business and field team has closed, with remaining staff made redundant.

Contacted by the Register for comment, Atomic Weapons Establishment spokespersons said a statement may be forthcoming next week. ®

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