Capita tells 35,000 staff they can work from home permanently

Outsourcing group Capita has announced that 35,000 out of its 55,000-strong workforce will be able to work from home permanently if they wish.

Jon Lewis, Capita’s boss, said that the group’s call centre staff no longer need to be based in a single location and revealed the business is shifting to a ‘hybrid’ work model.

Internal company surveys revealed that 72 per cent of staff would prefer to work up to three days a week from home. 

Hybrid work plan: Capita boss Jon Lewis has told 35,000 workers they can work from home

Operations: Outsourcing group Capita is responsible for running the London congestion charging zone

Lewis told the Press Association: ‘Call centres are to some extent, a historic capability today. There’s no reason why you need to put 2,000 people in a warehouse in the UK. Those people can work from home.

‘It isn’t dead, but there’s certainly going to be a lot less of them.

‘There may be some financial services activities where, for reasons of security, people have to be in a secure environment but for many of the things we do they don’t have to be in such facility.’

Lewis also said that businesses forcing staff back to offices could ‘have a significantly less attractive employee value proposition if they do that.’

He added: ‘Young people are inclined to want to work in an office environment because the work environment is a big part of their social life, but if you look at the whole demographic of the workforce in the UK, offering people that flexibility is going to be a very positive element of an overall employee value proposition.’

Last year, Capita closed 49 offices and reduced its office footprint, leading to savings of £11million. 

Collection: Capita is responsible for collecting the television license fee

In its annual results published today, Capita unveiled plans for a fresh restructuring aimed at simplifying its business and cutting costs.

The company, which is responsible for running the London congestion charging zone, recruiting British Army personnel and collecting the television license fee, is trimming the number of core divisions it has from six to three.

It also plans to raise £700million by selling a number of ‘non-core’ assets in a bid to boost its balance sheet. 

Shares in the company have lost 94 per cent of their value compared to 2015, but jumped 5 per cent or 2.31p to 48.49p this morning.

In the year to 31 December, Capita’s adjusted pre-tax profit fell to £65.2million, against £197.7million back in 2019. Adjusted revenue slipped 9 per cent to £3.18billion last year. 

The newly streamlined Capita will comprise three divisions. Capita Public Service will focus on strategic supply for the government, Capita Experience will build on the firm’s UK and EU customer experience markets, while a third division will comprise a portfolio of non-core businesses.

Capita said the ‘new simpler structure supports inflection to sustainable cash generation in 2022.’

The group will seek to raise £700m from selling non-core assets as it looks to shore up its finances.

On its quest to raise £700million, Capita said: ‘To support the balance sheet, our focus remains on efficient cash management, realising non-core disposals of £700m and planning to put in place a longer-term financing solution.’ 

Around £500million of the sale proceeds look set to be generated this year and the group also plans to cut its office space by a further 15 per cent in 2021. 

Boss Jon Lewis said that he expects the business to return to organic revenue growth this year and sustainable cash generation in 2022.

He added: ‘Despite the challenges, we have continued to make good progress, improving client relationships and winning significant new contracts.

‘Capita is a much better business than it was three years ago when we began our transformation.’

Britain’s outsourcing sector has struggled in recent years, with Carillion and Interserve collapsing.                 

On a mission: Capita plans to streamline its business and cut costs