Cap Gemini hints at more redundancies to boost margins

The spectre of redundancies continued to haunt Cap Gemini Ernst & Young, the Anglo-French IT consultancy, on Thursday after it hinted that it will have to continue to cut jobs to boost margins

Analysts said that they expected the company to continue to trim employees in its weakest areas - which include the UK and Italy - after it was expected to post flat or lower margins compared to the second half of last year.

Hiowever, the reduction is not expected to match last year's numbers after the company said that its head count was now more in line with its rate of growth.

Mike Tyndall, analyst at Nomura, said there was uncertainty over whether Cap Gemini made enough cost cuts after the company said that the second quarter would remain flat.