European computer consultancy to axe 5,500 jobs

Leading computer consultancy, Cap Gemini Ernst & Young, are to cut 5,500 jobs in addition to the 5,400 jobs the group cut last year.

The company made the announcement following a sharp fall in demand for the group's services.

Around 2,500 of the company's telecoms and financial services workers will lose their jobs immediately, with an additional, 3,000 "non client-facing" positions going thereafter.

The cuts come as a result of weak investment in computer systems and reduced spending on computer consultancy services by companies across the world. They are also part of the company's efforts to boost profit margins from 7.4% to 8.5% and to improve its market performance.

Also part of the efforts will be a radical restructuring and simplification of Cap Gemini Ernst & Young's organisation.

The company said the changes were aimed to improve its sales performance in its consulting, IT and outsourcing markets. (MB)

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