Capita CEO Jon Lewis retires from outsourcing giant

Jon Lewis, the turnaround king who helped revive Capita after a string of public scandals, has announced his intention to retire.

The outsourcing giant said Lewis, 61, will step down as CEO by the end of 2023 but will stay with the company until July next year.

Lewis initially joined as CEO in December 2017, replacing Andy Parker after he left amid a succession of profit warnings, debt-laden over-expansion and the group’s expulsion from the FTSE 100.

Capita’s reputation was further damaged by contract failures such as the delayed installation of an IT upgrade for the London congestion charge, missing British Army recruitment targets and catching too few TV license fee evaders.

Lewis, who was appointed problem solver, had previously led successful transformations at engineering services companies Landmark Graphics Corporation, Halliburton and Amec Foster Wheeler.

After joining Capita, the company’s share price hit a 15-year low as it scrapped a dividend, issued another profit warning and launched a £700m emergency offering.

But the group also began to sell off a significant portion of its business, shrinking its workforce from 73,000 to about 50,000 and becoming more high-tech oriented.

Although the company’s turnover has continued to fall steadily, net debt has plummeted from more than £1.1bn to around £85m at the end of last year.

It has also won some major government contracts, including a £925 million contract to provide training services to the Royal Navy and Royal Marines.

David Lowden, Capita’s chairman, said Lewis has shown “excellent leadership and determination in rebuilding Capita from the ground up.”

He added: ‘It is now a purpose-driven company that Jon has refocused, strengthened and grown again, while restoring customer confidence and improving co-worker engagement. He can rightly be proud of his achievements.’

Lewis’s departure comes a few months after it warned a cyber-attack affecting some of its biggest customers could cost the group £20m in sales.

The Welshman will be replaced by Adolfo Hernandez, the vice president of global telecommunications for cloud computing platform Amazon Web Services.

Hernandez has approximately three decades of experience in the technology industry, including as CEO of translation services provider SDL until its acquisition in 2020 by rival RWS Group.

He has also worked for French communications equipment company Alcatel-Lucent, Sun-Microsystems, and spent much of his early career at IBM.

Hernandez said, “The group is in strong financial health and well positioned for accelerated revenue growth in both the public service and customer experience markets, with a healthy pipeline of future opportunities.”

Capital shares rose 0.9 percent, or 0.26 pence, from 28.2 pence on Monday morning.

They remain well below their peak of around 800p in mid-2015.