Exclusive IT outsourcing outfit Capgemini is to slash its workforce at the Inland Revenue by more than 20 per cent following the HM Revenue and Customs (HMRC) decision to restructure its Aspire contract.

An announcement made to UK-based Capgemini staff yesterday confirmed that up to 600 jobs would be cut at the firm.

Public and Commercial Services (PCS) union representative for the firm Graham Steel told The Register that the decision was made due to a "severe cutback in money", which he estimated to be around £70m.

Just last week, HMRC confirmed that its Aspire contract with Capgemini and other IT suppliers would be extended by a further three years to June 2017.

Aspire (Acquiring Strategic Partners for the Inland Revenue) was set up to replace the contracts Inland Revenue had with EDS and Accenture for IT services and the National Insurance Recording System (Nirs2) respectively.

Steel said a 90 day consultation period will kick off, in which the PCS will try and help ensure that "the job-cut figure could be minimised as much as possible". But he added that, given the scale of reductions involved, compulsory redundancies at the firm were inevitable.

Asked if he thought that the government was clamping down on IT outsourcing, Steel responded: "No, this is purely a device to save money. More cash is being pumped into health and education and HMRC, and the DWP [Department for Work and Pensions] are suffering as a result."

Last month we revealed that the DWP had told EDS to cancel plans to outsource government work to India, impacting some 50 jobs.

Capgemini said in a statement to El Reg:

We are currently reviewing the Capgemini/Aspire contract to assess our ongoing requirements, and the business has entered a formal period of consultation with our works council on a compulsory redundancy programme which could affect up to 20 per cent of the Capgemini Aspire workforce across the whole business.

Staff will be informed of the outcome and implications once consultation is complete, expected around March next year.

HMRC said it was unable to comment on the job cuts at Capgemini, because it was not government policy to talk about business decisions made by commercial enterprises.

Capgemini reported 2006 global revenues of €7.7bn and has 80,000 employees worldwide. ®

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