UK-based Capita shares jumped by more than 6% on Tuesday after the company stated that it was planning on pushing for faster delivery of efficiency savings.
Capita revealed new cost-saving measures today as it aims to double its operating margin to 6% in the medium term.
Capita CEO Jon Lewis added, “We are, today, announcing the accelerated delivery of the efficiency savings announced in our Half Year Results with a £20 million increase in overhead cost reduction to £60 million on an annualised basis from Q1 2024. As part of the organisational review that underpins the programme we are announcing today, we continue to identify further areas of cost efficiency and will pursue these during 2024.”
The measures also include a 2% workforce cut. This is 900 out of the 50,000 employees in the offices worldwide.
Capita shares were up by 6.25% and were trading at 20.4p at the time of writing.
According to Russ Mould, Investment Director at AJ Bell, the developments were “good news for shareholders as it should benefit the company’s profit margins, but bad news for the 900 employees of Capita who face potential redundancy.”