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By | Paul Kunert 23rd October 2013 09:33

PC addict RM finally quits its building habit, plans to axe 300 jobs

The only question is - what took education specialist so long?

Under-fire education tech specialist RM has finally admitted what the rest of the industry already knew: that it can't make money building PCs and will instead concentrate on developing software and services.

It has been a rocky three years for RM, starting with the government's gradual closure of the Building Schools for the Future programme - RM was the top supplier here - which led to a painful review.

Several chief executives later and a few non-core business units lighter and RM looked to have found some balance again, though it was always odd that its management decided to stick with PC-building.

Clearly this wasn't a done job as RM initiated a review of the Education Technology (ET) operation, and today confirmed it is indeed quitting the PC biz.

"The division will exit the declining and low margin sale of personal computing devices. A significant reduction will also be made in the scale of the division's associated sales and marketing activities and in central services functions," RM said.

Existing projects will be fulfilled and RM will continue to resell third-party infrastructure hardware – for that read servers, storage, etc – as part of the continuing services business.

RM will begin a consultation with affected staffers regarding proposed redundancies. "The proposal is to reduce UK headcount, including temporary staff, by around 300 over the next 12 months".

With BSF activity being "rundown" and the exit from the PC business, RM warned revenues at the ET division all decline by about 50 per cent (£90m) over the next two years.

The closure of the PC business will result in one-off costs of £10m that will be reflected in the fiscal '13 results for the year ended 30 November, provisions for property and redundancies.

RM said it expects to "trade break-even" in fiscal '14 "as a result of the timing mismatch between revenue decline and cost elimination".

The plan is to forge ahead with software and services, areas that have been expanding with the firm's introduction of RM Unify and RM Books.

The Assessment and Data Services and Education Resources units are unaffected by the changes to ET. ®

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