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By | Kelly Fiveash 19th November 2007 12:06

Capgemini CEO claims 'truly tremendous' October

HMRC cuts not even a blip on the landscape

Capgemini's chief executive said Friday that the IT outsourcing firm had a "truly tremendous" October in the face of current economic uncertainty in the US.

But he failed to mention the significant job slashes made at HM Revenue and Customs (HMRC), where up to 600 UK workers are expected to take compulsory redundancy.

Last week, Capgemini confirmed to The Register that it would cut its Inland Revenue workforce by more than 20 per cent following HMRC's decision to restructure its Aspire contract.

However, that decision appeared to have little or no impact on the firm's financial outlook.

Paul Hermelin told the Morgan Stanley Technology, Media and Telecoms conference in Barcelona: "We do not so far see any US slowdown. We are vigilant but we do not see any slowdown," Reuters reports.

He reckoned that the North American arm of Capgemini's business had a "solid" October and predicted the fourth quarter looked good.

According to the CEO, demand for software products such as SAP and Oracle meant business was brisk at the firm.

He said: "The previous recession was the combination of an economic slowdown and the end of a technology cycle, so it was a double negative whammy. Now it's not the end of a cycle."

On Europe, Hermelin said there were no immediate plans for any large scale mergers and acquisitions.

"There were some reports we were going to be part of a massive European consolidation. We're not," he said.

He also told the gathered crowd that some cash would be put to one side in case demand from the financial sector, which accounted for 17 per cent of Capgemini's total sales in the last quarter, slowed.

Capgemini said in a statement (pdf) earlier this month that it saw global revenue grow by 11 per cent in the third quarter.

It added: "Outsourcing revenues are up by one per cent, despite the expected reduction in revenues from HMRC, a reduction more than balanced by strong activity otherwise." ®

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