Cap Gemini sheds staff

Cap Gemini, the IT services and business consultancy, is shedding 600 staff as part of a "100-day plan" to boost growth and reduce costs.

Targets for redundancy include operating and management staff in Cap Gemini's datacentres and ERP consultants specialising in Baan and SSA systems.

In a letter to all staff, Maurice Abell, Cap Gemini's new UK chief executive officer, described business performance in the UK as "unacceptable". He said, "Our business has still not recovered from the depressed market that affected our industry from the middle of last year."

Staff were warned, "Generating a respectable profit will make for a difficult and challenging journey. But the rewards . . . will be real."

Abell told Computer Weekly that the company was sharpening its focus on e-business and that 250 staff faced compulsory redundancy, 110 were leaving on agreed terms and about 240 jobs would be lost through "normal attrition".

He added, "The UK market over the past four or five months has changed significantly, with clients demanding faster, shorter projects and a lot more competition."

Abell said the 100-day plan was not linked to Cap Gemini's acquisition of the consulting practice of management consultancy firm Ernst & Young, and that the financial returns were "on target".

Jon Collins, senior analyst at Bloor Research, said, "Cap Gemini is not one of the 'big five' outsourcers, so it can't set the agenda, but it is following it with these moves."

He believed that Cap Gemini's reshaping of its ERP portfolio "said more about SSA and Baan than about Cap Gemini".

Cap Gemini has not notified its general customer base about the job losses. Only clients working with a Cap Gemini employee who is being made redundant have been informed.

Abell rejected suggestions that Cap Gemini customers would suffer as a result of the job cuts. "They will get a better service," he said.

One major Cap Gemini client told Computer Weekly that he was surprised at the job losses, but was confident that the service level agreements he had negotiated will prove effective. "I'll be watching them closely," he said.