Capita

Capita plc, a UK-headquartered business process outsourcing and professional services company, had grown through over 100 acquisitions into a sprawling conglomerate with approximately £3.5 billion in revenue (2019) and over 60,000 employees. The company operated through multiple divisions, each with its own leadership team, finance function, HR department, and IT systems, creating an overhead burden disproportionate to revenue. Operating profit fell 56% to £111 million in 2020, and pre-tax profit sank 67% to £65.2 million. The company's 294 properties across the UK and internationally represented a significant fixed cost base, many of which were underutilized following the shift to remote work during COVID-19.

Between 2020 and 2022, CEO Jon Lewis executed a systematic organizational simplification program:

• Division consolidation: Restructured into two core divisions — Capita Public Service and Capita Experience — plus a Portfolio division of non-core businesses earmarked for disposal, eliminating multiple divisional leadership teams, their associated overhead structures, and management complexity.
• Property footprint reduction: Temporarily closed 168 of 294 properties during COVID-19, then made many closures permanent. Consolidated to a significantly smaller footprint, realizing £10 million in variable property cost savings in 2020 alone, with ongoing annualized savings as leases expired.
• Headcount optimization: Achieved £48 million in staff-related savings in 2020 through the elimination of duplicated management layers and support functions across the former divisional structure.
• Discretionary spend reduction: Cut £64 million in discretionary expenditure including external consulting fees, travel, sponsorships, and non-essential professional services.
• Asset disposal program: Divested non-core businesses generating total cumulative proceeds of over £1.3 billion by end of FY2022. The programme exceeded its initial £700 million target ahead of schedule (achieved by end-2021), with subsequent Portfolio division disposals in 2022 bringing total cumulative receipts to over £1.3 billion (per Capita FY2022 Full Year Results), allowing management to focus on remaining core operations.
• Shared services consolidation: Centralized finance, HR, procurement, and IT functions that had previously been replicated across divisions into unified shared services teams.