LS Retail cuts 39 jobs after Rannís assessment change

LS Retail says a change in how Iceland’s Research Centre (Rannís) assesses software development projects has contributed to its decision to cut 39 jobs. The company gave the explanation to mbl.is after announcing wide-ranging restructuring.

Most of the employees who lost their jobs worked in development. Seventeen of the 39 were in Iceland, and the cuts amount to more than 10% of the company’s global workforce.

LS Retail, an international software company headquartered in Iceland, said the restructuring is intended to sharpen its strategy, improve operational efficiency and support future growth. It also cited a significant reduction in public support for software research and development in Iceland.

The company has received R&D grants through Rannís for several years. The scheme reimburses 24% of tax paid in relation to employees’ work on research and development projects.

LS Retail said Rannís’s assessment had changed substantially and that it was now harder to get approval for projects similar to ones previously approved, without specific explanations. The company said it had included the grant in its financial plans and had therefore been forced to reduce its development team, slowing or stopping work on some new products. It added that most of its revenue comes from abroad.