Capita, one of the major providers of outsourced services to the UK government, plans to cut at least 200 jobs amid financial difficulties exacerbated by the coronavirus pandemic.
The company has started a consultation process with a number of employees about planned redundancies. The job cuts are focused on Capita’s central support teams in London. They are not expected at this stage to affect employees working for clients. However, they underline the financial pressures at a company on which the government has relied heavily during the pandemic.
Capita has said it is working on 100 different projects for the UK government in its pandemic response, including providing workers for healthcare call centres.
The planned redundancies come amid a wave of job losses in the UK economy, with the British Gas owner, Centrica, the aircraft manufacturer Bombardier and the carmaker Nissan among those to cut workers in the last week. The jobs of close to 100,000 workers with major UK operations are at risk, according to the Financial Times, with more expected as government support to businesses winds down.
Capita, which employs 61,000 people, earned half of its 2019 revenues from providing services to the UK government in contracts as diverse as running army recruitment, collecting the BBC licence fee and enforcing London’s congestion zone.
In March, Capita warned investors that the pandemic would have a “net negative” effect on the business. It is thought that further job cuts are possible, as it tries to remain within conditions set by its lenders.
A Capita spokesman said: “As a result of the ongoing Covid-19 crisis, we are taking further, decisive cost-cutting action to preserve cash and protect our financial position. This will regrettably result in the loss of a number of jobs within our head office.”
