PracticeConsultingEx-E&Y consultancy pledges to ‘transform’ profits

Ex-E&Y consultancy pledges to 'transform' profits

Cap Gemini Ernst & Young will announce a transformation plan next week, designed to return the IT services company to 'satisfactory' profitability.

Chief Financial Officer William Bitan told the Wall Street Journal Europe that the French company has been drafting a transformation plan for the past few weeks, to deal with market conditions and ‘find the way back to a satisfactory profitability level.’

A company spokesman would not comment on potential layoffs but said that ‘transformation’ indicates something different from previous restructuring plans. Over the past year, Cap Gemini cut some 3,000 jobs, incurring a 181 million euro restructuring charge, according to the paper.

Merrill Lynch analyst Ariel Bauer said last week that some 5,000 cuts will be necessary to push margins back up. Sogeti, the division created last year and dedicated to projects at small and midsize clients, could gain more independence within the company, some said.

Others said the role of former Ernst & Young staff could become more prevalent, the WSJE reported. Cap Gemini bought Ernst & Young’s consulting activities in 2000.

In April the company reported first-quarter consolidated revenue of euros 1,873m (£1.2m), 15.3% down on the same period last year.

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