Capita has announced plans to cut around 900 jobs globally as part of a cost-cutting drive, with indirect support function and overhead roles set to be primarily affected.

The British outsourcing firm, which operates in the UK, Europe, India and South Africa, employs around 50,000 people, with the potential job cuts set to affect less than 2% of its workforce, Reuters has reported.

The move comes following Capita’s half-year results, which outlined the firm’s medium-term target to double its operating margin to 6%, having been underpinned by cost savings of £40m per annum by the end of 2024.

Capita said that the cutting of these jobs will save approximately £60m by Q1 2024.

The firm has stated that it continues to trade in line with its expectations, delivering positive operational and financial performance and has won contracts with a total contract value of £2.85bn in the year to date, after reaching a full-year TCV in 2022 of £2.59bn.

Chief executive officer at Capita, Jon Lewis, 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."

Head of investment at interactive investor, Victoria Scholar, added: "Capita is planning to lay off around 900 staff out of its global workforce of 50,000 as part of the company’s plans to cut costs and boost profit margins. This comes as a welcomed development for its shareholders, with the stock trading sharply higher today, helping to reverse some of its year-to-date losses.

"Shares in the outsourcer are still down by over 17% so far this year, reeling from a major ransomware attack in March this year which revealed that the company had unsecured data online, impacting customers, suppliers, and employees. According to the ICO, around 90 organisations were affects by personal information breaches."

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