Since it was sold last year, the company's work force has been halved and its complex put up for sale.
By JEFF HARRINGTON, Times Staff Writer
© St. Petersburg Times, published September 20, 2002
CLEARWATER -- CGI Group of Montreal had grand plans for IMRglobal when it bought the computer consulting company 14 months ago. CGI's chief executive talked enthusiastically about adding to the 400-plus employees at IMR's Clearwater headquarters, making it a "center for excellence."
IMRglobal founder Satish Sanan went his new boss one better, describing Clearwater as CGI's new U.S. headquarters from which he personally would oversee all operations in Japan, Australia and India as well as the United States.
"This office is not going anywhere, and I'm not going anywhere," vowed Sanan as he became a CGI vice chairman.
A year later, those ambitions for Clearwater have fizzled amid broken promises.
CGI has been systematically relocating its Clearwater employees to other offices, cutting its local employee roster in half. Last month, it put its 14-acre Clearwater office complex on the market with a listing price of $18.5-million.
And the executive who made that vow of commitment, IMR's Sanan, quietly retired this summer at age 54, effectively turning the Clearwater operation into an outpost overseen by a CGI executive in Andover, Mass.
CGI is no longer making any sweeping commitments to Clearwater. But it still insists that the Florida operation plays an important role in the organization and that there are no imminent plans to pull up stakes.
As for its long-term future in the Tampa Bay area?
"At this point, it's status quo. I do not have information to give you," CGI spokeswoman Eileen Murphy said from the company's Montreal headquarters.
Reached at his family's horse farm in Ocala on Thursday, Sanan said he wasn't upset about the way things turned out. "No disappointment. No bad feelings," he said.
Sanan said he left the company because CGI was making changes, which he would not specify, and he doubted he would fit in. Plus, he wanted to devote time to helping the businesses of his daughter Nadia, who runs the farm that raises racehorses, and daughter Chemain, who is an investment banker.
Sanan refused to discuss why the company's work force here is shrinking after promises were made to increase it. "I have not stayed in touch since I left," he said, "and I'd rather not talk about CGI. I think it's inappropriate."
Calls to CGI's Clearwater office were directed to Marjorie Bulone, director of marketing, who could not be reached.
Clearwater's diminishing role is apparently driven by a CGI culture that is organized by specialties and client needs instead of geography.
Murphy pointed out that some Clearwater employees were relocated to Cleveland, for instance, because they specialized in health care. Others went to New York or one of CGI's 60 other offices worldwide. Some are stationed at clients' offices, working through CGI's large outsourcing network.
"Our gray matter travels," Murphy said.
Last month's decision to put IMR's Clearwater building up for sale should not be taken as a sign of plans to leave or reduce staffing levels beyond the 200 remaining workers, Murphy said. CGI, she said, has a "philosophy" to lease space in all its buildings, even its Canadian headquarters.
It may lease space from whomever buys the Clearwater offices or seek new quarters to lease, she said.
So far, listing agent John Gerlach of Colliers Arnold has received preliminary interest in the site from four area businesses, which he declined to identify.
The Church of Scientology, which has its international spiritual headquarters in Clearwater, contacted him about receiving a package and touring the 130,000-square-foot site, but Gerlach dismissed the inquiry as more curiosity than serious interest. Scientology spokesman Ben Shaw said the church has no interest in purchasing or leasing the property.
The Hospice of the Florida Suncoast said it was among those examining the buildings. But Scott Kistler, the nonprofit organization's vice president for operations, concluded the property is too big and too expensive and has a corporate look and feel that doesn't fit with the hospice's mission.
Clearwater developer Al Justice said his firm designed the complex to be the headquarters for a technology firm, and it will be attractive to another tech company interested in a headquarters with ample room to expand.
The IMR Global Center project was envisioned to be a $65-million complex, with a total of 310,000 square feet and a parking garage accommodating 700 vehicles, Justice said. IMR decided not to go forward with the full project, Justice said, after company revenues tumbled.
IMR's pair of three-story buildings in Clearwater opened in 2000 as a new landmark in downtown Clearwater and a $20-million punctuation mark to one of the bay area's biggest success stories.
An Indian-born entrepreneur, Sanan turned IMRglobal into an important niche player in information technology and turned himself into the highest-paid executive in Florida. In 1998, his compensation package hit $54-million as IMR-global made a mint helping companies prepare for the Y2K bug.
Once the year 2000 arrived, however, IMRglobal had trouble shifting gears to become a more diverse computer consultant.
With revenues drying up, Sanan turned to CGI, agreeing to a $438-million merger. The deal created the fourth-largest independent provider of information technology services in North America.
Some analysts figured the Clearwater operation eventually would be dismantled, but Sanan strongly protested that conclusion, saying he drove a bargain that ensured growth for the bay area.
"I'm at the rudder here; I'm in control," Sanan said at the time. "They're looking to me to grow this business."
Sanan joined CGI's board and received a two-year employment agreement paying $1-million in annual salary and bonuses. He also received CGI stock options, immediate vesting of IMRglobal options and the forgiveness of a $5-million loan from IMRglobal.
The deal has proved to be a moneymaker for CGI as well, opening markets in India and helping the Canadian consultant diversify from a dependence on the moribund telecommunications sector.
With more companies outsourcing their information technology needs to save money, CGI has been on a roll.
The company has 14,600 employees worldwide, up from a combined 13,000 when it merged with IMRglobal.
In its last reported quarter ended June 30, the company posted net income of $36.5-million, up 50 percent from the year-ago period. Revenues jumped 39 percent from $398.5-million to $553.4-million.
Despite the encouraging numbers, CGI hasn't escaped the stock market doldrums. Since the merger closed in July 2001, CGI's stock, which is traded on the New York Stock Exchange, has slumped from the $5.50 range to under $4 a share. It closed Thursday at a new 52-week low of $3.33 a share, down 25 cents or 7 percent.
-- Times staff writers Joe Childs, Rob Farley and Michael Sandler contributed to this report, which also used information from Times files. Jeff Harrington can be reached at firstname.lastname@example.org or (813) 226-3407.