Outsourcer Capita warns up to 900 jobs at risk in cost-cutting drive

The company that manages the licence fee for the BBC and runs recruitment for the Army has said it might slash up to 900 jobs in a bid to save costs.

Outsourcing giant Capita said it would shortly launch consultations as it looks to save around £60 million per year from the early part of 2024.

The business said that the cuts would mainly hit “indirect support function and overhead roles”, putting around 900 roles at risk.

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

“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 business said: “The organisational changes proposed primarily impact indirect support function and overhead roles which mean that approximately 900 roles are at risk of redundancy.”

It added: “Based on an extensive organisational review, the group will shortly commence employee consultation programmes which are expected to deliver cost savings of £60 million on an annualised basis from the first quarter of 2024.”

It said the plan would cost around £27 million to implement.

Capita employs around 42,000 people, most of whom are based in the UK.

The firm holds a raft of major contracts with the Government.

Just on Monday it won a £239 million 10-year contract to manage the Civil Service Pension Scheme on behalf of the Cabinet Office from September 2025.

The business also runs contracts with dozens of major businesses, including Royal Mail.

So far this year the outsourcer has won contracts worth £2.85 billion, up from £2.59 billion in the entirety of last year.

In April Capita said hackers had accessed its systems and were able to access the personal data of some staff and clients.

Around 90 organisations wrote to the Information Commissioner’s Office to report that their data might have been breached.

Capita said the incident would cost it between £20 million and £25 million before taking into account any potential fines.