News of the closure was announced by Endre Rangnes, the former IBM Norway chief recruited last month to replace outgoing EDB Business Partners' CEO Bjørn Trondsen.

Trondsen quit the company at the end of last year after disappointing results led to the group shedding 185 staff.

The decision to exit the largely unprofitable consultancy business was made under a revised business strategy for the group announced on 30 January.

The accounting impact of the closure is provisionally estimated to be a charge of Nkr21 million, and will be recognised in the second quarter accounts. The business area had approximately 300 employees at the start of the year, and 150 of these will now be reallocated to the group's new divisions.

Ragnes says executive management had evaluated a number of alternative solutions, including the possible sale of the Oslo-based consulting business as a single unit.

"We cannot sell this business at an attractive price unless the sale includes expertise that is of strategic importance for us and that has a natural place in the new EDB group. Since this would not further the group's value creation we have had to rule out such a sale," he explains.

Under the closure programme, Business Consulting in Oslo will shed just under 40 full-time equivalent positions.

The group will also withdraw from running consultancy activities in Trondheim, with the 18-strong management team taking over the business as an independent entity.

EDB Consultancy subsidiaries Dolphin and Stradec, employing around 45 staff in total, are also impacted by the restructuring. Negotiations are currently underway for a sale of the profitable Dolphin subsidiary, while a final decision on the future of loss-making Stradec will be made in late June.

The remaining 150 staff will be transferred to the Computer Operating Services business area and EDB Telesciences.

Seperately, EDB Business Partners has announced a five-year NKr314 million contract with Sweden's SalusAnsvar Bank for the purchase of software, IT operating services and consultancy services for its banking activities.

The contract represents EDB's first ASP-based banking system delivery to the Swedish market.