Capita In Crisis: Bring All Outsourcers Back In-House

- Leo Marsden

Shares fell by more than 47%, resulting in enormous profits for hedge funds who had sold them ‘short’ - essentially betting on misery for Capita’s workers and small business suppliers. Shares in Serco and other outsourcers also fell significantly, reflecting a wider malaise.

Despite the collapse, the company appears to have avoided bankruptcy, with emergency measures to halt dividend payments and issue £700 million in additional shares. Management is also drawing up plans to ‘cut costs’ - no doubt meaning attacking workers’ jobs, pay and conditions.

This may provide bosses temporary respite - at the cost of the workers who make them their money. But it will not solve the problems of a company with over £1 billion of net debt suffering from decades of underinvestment.