Outsourcer Capita to slash up to 900 jobs
- Capita said the redundancy plan will cost around £27 million to implement
- The company also said on Tuesday that it was trading in line with expectations
- So far this year, Capita said it has secured £2.85bn worth of contracts
Outsourcing giant Capita has warned that up to 900 staff could lose their jobs as part of a cost-cutting programme.
The London-based company, which manages the BBC’s licensing costs, said it will soon start staff consultations and expects to deliver £60 million in annualized cost savings from the first quarter of next year.
Implementing the redundancy plan will cost around £27 million and will mainly affect those in indirect support roles and overhead positions, the group added.
Redundancies: Outsourcer Capita has warned that up to 900 people could lose their jobs
Capita also told investors on Tuesday that it is trading in line with forecasts and has won £2.85bn of contracts since the start of 2023, compared to £2.59bn at the same time last year.
Yesterday the company announced it had agreed a £239 million, ten-year deal to manage the Civil Service Pension Scheme for the Cabinet Office from September 2025.
Other contracts won this year include two contracts to assess health and disability benefits, worth £565 million, from the Department for Work and Pensions and Northern Ireland’s Department for Communities.
It has also signed agreements to work on a new fraud reporting service for the City of London Police and to provide services to people receiving student benefits.
Capital shares rose 10.4 per cent to 21.2p on Tuesday morning, making them the top gainer on the FTSE 250 Index.
However, they are still down around 17 percent this year, partly due to a cyber attack in March that briefly left Capita employees without access to IT systems.
Around 90 organizations wrote to the Information Commissioner’s Office to say their members’ data may have been compromised, including the pension schemes of Unilever, BAE Systems and Marks and Spencer.
Capita expects the incident to cost between £20 million and £25 million, including investment to strengthen cyber security, specialist professional fees and remediation and remediation costs.
Headcount fell to a pre-tax loss of £67.9m following this incident in the first half of 2023, although this was also due to costs associated with business closures and large goodwill impairments.
A few days after the company published its interim results, Jon Lewis announced he would step down as group CEO by the end of the year.
Lewis took over as CEO at the end of 2017 as Capita suffered from back-to-back profit warnings, massive debt and its exit from the FTSE 100.
During his tenure, the turnaround specialist has overseen tens of thousands of job cuts, the sale of numerous divisions and tried to turn Capita into a more high-tech company.
Although Capita’s annual revenues have fallen every year since he arrived, Capita’s net debt has fallen from more than £1.1 billion to £166.2 million at the end of June.
Adolfo Hernandez, the vice president of global telecommunications for cloud computing platform Amazon Web Services, replaces Lewis as CEO.