Outsourcing firm Capita has kicked off a programme that is set to make approximately 900 roles at risk of redundancy as the company tries to cost save.
The company’s aim is to double its operating margin to six per cent but in order to do this it needs to cost save £40m per annum on an annualised basis by the end of 2024. The group will shortly commence its employee consultation programmes which are expected to deliver cost savings of £60m on an annualised basis from Q1 2024.
Approximately 900 roles are at risk of redundancy out of its 50,000 headcount. The cuts are targeted primarily at indirect support functions and overhead roles.
The group was hit with a cyber attack earlier this year due to an IT failure primarily affecting “access to internal Microsoft Office 365 applications”. As a result, the firm revealed that this attack would likely cost £15 to £20m to resolve as personal information was leaked onto the dark web.
The Group will make a pre-close statement on 14 December 2023 and the Full Year Results announcement is planned for 6 March 2024.
Speaking on today’s announcement, Jon Lewis, 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 Q1 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,” he added.
Capita stock is trading at 19.2 p per share today.