Cap Gemini to reorganize, lay off at least 2,500

Cap Gemini Ernst & Young will immediately cut 2,500 jobs and re-evaluate 3,000 more by January in an effort to reorganize its business in the face of a changing marketplace, the Paris-based company announced Thursday.

The company will cut the 2,500 workers from its European and North American telecom and financial services sector to meet short-term financial goals and to increase the percentage of consultants working with clients. Cap Gemini wants to have at least 73 per cent of its consultants working on billable projects, and not “on the beach,” as one insider termed it.

This initial layoff will be followed by a reorganization of 3,000 more jobs by January, according to a company statement. Currently, the IT consulting firm has about 56,500 employees. The company was formed when Cap Gemini bought Ernst & Young’s consulting business in May 2000.

North American spokesman David Schutzman said that while some of those 3,000 jobs might be eliminated, other jobs might be filled by reassigning employees.

Those 3,000 workers would be involved in back-office jobs and wouldn’t be from the company’s cadre of consultants, he said.

The cuts are part of a larger effort by the company to reorganize itself in the face of a declining market for IT consulting services. It has named the plan LEAP, which stands for Leadership, Expansion, Alignment and Portfolio and Productivity Management.

In addition to the cuts, the company also announced a reorganized management team as part of its LEAP plans.

Alexandre Haeffner was named chief operating officer; Mark Hauser will head the company’s North American operation; Paul Spence will do the same in the U.K. and Ireland; and Paul Thorley will head Asia Pacific operations. Paul Cole was named sales director and head of the LEAP program, and John McCain will be Haeffner’s deputy beginning Oct. 1.