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Capita plans 900 job cuts in cost-cutting plans

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Outsourcing group Capita will trim its workforce by 900 in a cost-cutting move.

It aims to streamline operations and generate savings of £60 million annually, starting next year. 

The company is known for managing services for local councils and the military.

It also works with the NHS and oversees the BBC TV license fee.

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The cuts will primarily target support function roles, focusing on areas such as administration rather than customer-facing positions.

Capita is a London-listed firm with 43,000 employees.

It is largely UK-based but also has sites in Europe, India, and South Africa.

The firm plans to consult with employees over the impending job cuts. 

The cuts are part of a plan to boost efficiency.

Cost-cutting is likely to continue as the company follows an organisational review.

This is to identify and pursue additional areas of cost efficiency throughout 2024.

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The outsourcing group is still recovering from a cyber-attack in March, which led to huge costs of up to £25 million. 

This attack, executed by the Black Basta ransomware group, targeted Capita’s Microsoft Office 365 software, compromising personal data belonging to company staff and numerous clients. 

The aftermath of the security breach contributed to Capita’s pre-tax loss of nearly £68 million in the first half of the year.

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Jon Lewis, Capita’s CEO, said: “We are, today, announcing the accelerated delivery of the efficiency savings announced in our half-year results with a £20m increase in overhead cost reduction to £60m on an annualised basis from the first quarter of 2024.

“As part of the organisational review which underpins the programme we are announcing today, we continue to identify further areas of cost efficiency and will pursue these during 2024.”

The redundancy program, expected to result in one-off costs of £27 million, remains open-ended.

More job cuts could be on the way

This means Capita is not ruling out the possibility of further job cuts.

Despite these challenges, Capita reported trading in line with expectations, securing contracts worth £2.9 billion, surpassing the £2.6 billion achieved in the previous year. 

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