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By | Paul Kunert 9th March 2012 10:43

Crapita ITS stomps pay rise hope, flushes 2012 bonuses

Master stroke to make it a 'great place to work'

Cost-cutting Capita IT Services (ITS) has warned staff that bonuses will once again be shelved and salaries frozen in 2012.

The integrator called for voluntary redundancies before Christmas and kicked off austerity measures including a review of travel and subsistence across ITS and procurement of systems and services.

In an internal business update seen by The Register, bosses told staff that bonuses were not paid out last year because sales were "down against our target" and certain contracts had "delivery and margin challenges".

It added that 2012 would be another rocky year in terms of the economy, and that sticking to the business plan was reliant on the Unity biz transformation scheme.

"In light of our company and divisional results we do not have the money to fund the payment of discretionary performance bonuses or pay rises," it added.

The firm - which previously bought up resellers including ComputerLand and Ramesys - said it will only dish out bonuses that are "contractual entitlements" for staff working at acquired companies, but this too will be reviewed in 2012.

The plan is to unify a pay review date for some point in 2013 across the entire group, which employs 46,500 staff worldwide including 3,800 at ITS.

Capita Group recently reported a seven per cent rise in sales to £2.9bn for 2011, but pre-tax profits dipped from £309.8m to £302.9m.

In total, £620m of group sales contracts have been won this year, Capita told its staff in the biz update, and the pipeline stands at £4.6bn compared to £4.7bn in July. The slide deck stated: "As a business we have so much to fix - but we can't boil an ocean."

Capita is to launch five practices this month covering these areas of IT: infrastructure and cloud; end-user computing; networks security and ISP; applications and user experience; and unified comms and contact centres.

The firm said the priority for the year is to "drive top line growth", the "consolidation of function and locations", a "better utilisation of offshore capability" and a "reduction in third party spend". It added that "fixing the processes and building a culture to make it a great place to work" were also on the agenda, although quite how it will achieve this against the current backdrop will be a challenge, say company sources.

Morale in the ITS workforce has hit "rock bottom" one said, who added this was especially true of staff in Capita's Farnborough office. The site is set to be closed and its workers relocated to Reading or Basingstoke.

The Reg understands the voluntary redundancy programme that started in November did not run smoothly and an employee council is to convene to discuss such matters.

"There may be other locations [that get shuttered] but management are keeping that very close to their chest," said the source.

A spokeswoman at Capita Group, said the restructure was part of its Unity "improvement programme".

"A review of its cost base is included in that and is, indeed, what many of its competitors are doing. In this situation reducing headcount, through voluntary means, and applying pay freezes, is not uncommon," she added.

Capita ITS refused to confirm the number of employees that had taken redundancy. ®

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