Capita, a leading outsourcing group that provides services to various sectors including local councils and the NHS, is set to cut 900 jobs in its latest cost-saving initiative. The majority of the job cuts will affect support function workers and administrative roles rather than customer-facing staff. The move is expected to save the company £60 million annually, starting from next year.
With a workforce of 43,000 employees, predominantly based in the UK but also spread across Europe, India, and South Africa, Capita operates from six main hubs in London, Manchester, Sheffield, Leeds, Edinburgh, and Belfast. The company plans to consult its employees regarding the upcoming changes.
The decision to reduce its workforce comes as Capita continues to recover from a cyber-attack earlier this year, which has cost the company approximately £25 million. As a result, Capita reported a pre-tax loss of nearly £68 million for the first half of this year. The cyber-attack, carried out by the Black Basta ransomware group, targeted Capita’s Microsoft Office 365 software and compromised personal data of both employees and clients.
Jon Lewis, the CEO of Capita, stated that the company is focused on delivering efficiency savings and aims for an annual overhead cost reduction of £60 million by the first quarter of 2024. He also expressed the company’s commitment to identifying further areas of cost efficiency and pursuing them in the coming years.
While the redundancy program will result in one-off costs of £27 million, Capita remains optimistic about its overall performance. The company is trading in line with expectations and has secured contracts worth £2.9 billion, surpassing its previous year’s total of £2.6 billion contracts.
Capita has recently divested its resourcing and non-core software businesses to concentrate on its primary divisions: Capita Public Service, which offers software, IT, and business process services to the UK government, and Capita Experience, which specializes in pensions administration and payment services. As of now, Capita administers over 450 pension schemes, serving 4.3 million members in the UK.
The announcement of job cuts has had a positive impact on Capita’s shares, which rose by 10% to 21p following the news. Despite the current challenges, Capita is determined to streamline its operations and reinforce its core divisions to ensure sustainable growth in the long term.
Frequently Asked Questions (FAQ)
1. How many jobs is Capita planning to cut?
Capita is planning to cut approximately 900 jobs as part of its effort to save costs.
2. Which employees will be affected by the job cuts?
The job cuts at Capita will mainly impact support function workers and administrative roles, rather than customer-facing staff.
3. How much money is Capita expected to save annually?
Capita expects to save £60 million each year starting from next year as a result of the job cuts.
4. When did Capita experience a cyber-attack?
Capita suffered a cyber-attack in March of this year, which has cost the company approximately £25 million.
5. What are Capita’s primary divisions?
Capita’s primary divisions are Capita Public Service, which provides software, IT, and business process services to the UK government, and Capita Experience, which specializes in pensions administration and payment services.