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Capgemini reduces consultancy charges

Cliff Saran

Capgemini has lowered pricing in its consulting and local professional services businesses according to its latest quarter results.

The IT services firm's UK and Ireland sales fell 6.9% in its third quarter 2012s.

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Capgemini consulting rates were cut 2.2% and local processional services rates dropped 0.5%. Capgemini CFO Nicolas Dufourcq said the company reduced the decline of its consulting business.

The systems integration TS [technology service] is growing more than 3% and outsourcing is also growing.” He described the consulting arm as the “swiss watch” of the Capgemini business and said pricing was stable, “which is where we want to be.”

Overall, the company posted 1% growth in the quarter with revenue of €2.53bn.

“In spite of the austerity plans, the UK is still growing,” said Dufourcq.

The Capgemini Technology Services business grew 3.4% compared to the same period last year. However, its Consulting (-4.0%) and Local Professional Services (-2.4%) posted losses.

Capgemini cut staff in the consulting division by 7.1% to 3,168 employees.

During the quarter, 52% of recruitment was for offshore staff. Capgemini recruited almost 10,000 people in India.

Dufourcq added: “We are facing Q4 which will be comparable to Q3. We maintain our guidance for the growth of the company for the full year of 1%.”

Paul Hermelin, chairman and CEO of Capgemini Group added: “The development of our offering portfolio towards high value-added segments and of our geographical mix in favour, primarily, of the United States, as well as the continuation of our offshore strategy, allow us to provide an optimal response to client demands.”

Earlier this month the company announced that E.ON had outsourced application services to Capgemini as part of a five-year restructure of its IT services in a deal worth about €50m.


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