Outsourcing giant Capita has warned that up to 900 staff members could lose their jobs as part of a cost savings programme.
The London-based firm, which manages the BBC licence fee, said it would soon launch staff consultations it expects to deliver £60million of annualised cost reductions from the first quarter of next year.
Implementing the redundancy plan will cost about £27million and predominantly affect those in indirect support function 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 it is trading in line with forecasts and had won £2.85billion worth of contracts since the beginning of 2023, compared to £2.59billion at the equivalent point last year.
Just yesterday, the company revealed it had gained a decade-long £239million deal to manage the Civil Service Pension Scheme for the Cabinet Office from September 2025.
Other contracts won this year include two health and disability benefit assessment contracts valued at £565million from the Department for Work and Pensions and Northern Ireland’s Department for Communities.
It has also secured deals for work on a new fraud reporting service from the City of London Police and to supply services to people receiving the Disabled Students’ Allowance.
Capita shares jumped 10.4 per cent to 21.2p on Tuesday morning, making them the top riser on the FTSE 250 Index.
However, they have still fallen by around 17 per cent this year, partly due to a cyber attack in March that briefly left Capita employees unable to access IT systems.
Approximately 90 organisations wrote to the Information Commissioner’s Office to say that their member’s data might have been compromised, including the pension schemes of Unilever, BAE Systems, and Marks and Spencer.
Capita expects the incident to cost between £20million and £25million, which includes investment to bolster cyber security, specialist professional fees, and recovery and remediation costs.
Capita swung to a £67.9million pre-tax loss in the first half of 2023 following this incident, although this was also because of costs related to business exits and major goodwill impairments.
A few days after the firm published its interim results, Jon Lewis announced he would stand down as the group’s chief executive towards the end of the year.
Lewis joined as CEO in late 2017 when Capita was reeling from successive profit warnings, massive debts and its departure from the FTSE 100.
During his tenure, the turnaround specialist has overseen tens of thousands of job cuts, the sale of numerous divisions, and sought to make Capita a more high-tech company.
While Capita’s annual revenues have declined every year since he arrived, its net debts have plunged from over £1.1billion to £166.2million at the end of June.
Adolfo Hernandez, the vice president of global telecommunications for cloud computing platform Amazon Web Services, is replacing Lewis as chief executive.
