Cap Gemini is cutting 1,500 jobs, or 2.5 per cent of its workforce, as it continues to try and cut costs. Redundancies will cost the firm €140m but should cut annual costs by €110m.

The consulting firm maintained its prediction of 10 per cent growth over the course of next year. Paul Hermelin, chief executive at Cap Gemini, said it wasn't just about big contracts but also that "run-of-the-mill has stabilised".

Nicholas Dufourcq, chief financial officer at Cap Gemini, said: "Management layers will be drastically reduced. Then there are targeted layoffs all over the group. It has started at the beginning of the fourth quarter."

The news emerged as Cap Gemini posted revenues for the third quarter of €1.61bn, up from €1.34bn for the third quarter of 2003. Sales grew 16.7 per cent in Europe and 2.8 per cent in the US. Figures were boosted by two big money outsourcing contracts with Texan electrcity supplier TXU and the Inland Revenue in the UK. The firm said outsourcing revenue will provide 35 per cent of total revenues in the second half of the year.®

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