Capita plans 400 redundancies across IT services operations

Outsourcing giant prepares to migrate functions to India

Capita is poised to make "approximately 400 redundancies" across its IT services business as it looks to cut costs and move certain operations to India.

In a statement issued to ChannelWeb, the firm claimed that it has decided "a revised delivery model is necessary" if it is "to maintain its competitive position in the marketplace".

A consultation period, involving affected staff and their representatives, begins today. The goal is ultimately to migrate some functions to India, while "achieving headcount efficiencies on a function or location basis in the UK".

The Capita group turned over more than £2.9bn in FY11, with pre-tax profit of £385.2m. Accounts for registered company Capita IT Services Ltd showed 2010 sales of £64.5m, with operating profit of £5.3m. Average employee numbers were 320 during the year.

Today's news comes in the same week as Capita Business Services was chosen as one of 18 suppliers on a £575m schools ICT and services framework.

Capita's full statement on the redundancy consultation is below.

"In order to maintain its competitive position in the marketplace, optimise operational efficiency and maintain and improve service delivery to its clients, Capita's IT services business has concluded that a revised delivery model is necessary.

"As a result, on 30 March 2012 we commenced a series of consultation exercises involving our employees and their representatives, some focused on moving elements of our work activity to our existing IT services operation in India, and others focused on achieving headcount efficiencies on a function or location basis in the UK. At this stage we believe this may lead to approximately 400 redundancies."