The large outsourcing giant Capita reported a net loss of 106.6 million pounds ($135.6 million) for the year 2023, with a significant portion of the losses attributed to a costly cyber attack in April.
In May, the company stated that resolving the aftermath of the incident would incur a cost of around $25 million, bringing the total expenses related to the hacking to $32.2 million. This financial setback led to a 20% reduction in the company’s market capitalization, disappointing shareholders.
The impact of the cyber attack on the business was substantial, resulting in a decrease in customer loyalty index from +25 to +16, particularly affecting pension management activities. The cyber attack dealt a major blow to operating profit, causing cash flow to drop from $125.2 million to $52.4 million, partly due to expenses incurred in mitigating the cyber attack aftermath.
Aside from the cyber attack, other factors that affected Capita’s financial performance included the termination of certain business contracts, a decline in business reputation, and costs associated with the company’s cost reduction program.
In response to these challenges, Capita’s new CEO, Adolfo Ernandes, announced plans to further reduce costs by $127.2 million by mid-2025. Additionally, in November 2023, the company revealed its intention to cut approximately 900 jobs, with the possibility of more layoffs in the future.
Looking ahead, Capita’s strategy involves a focus on operational accuracy, collaborative solution development with customers, accelerated adoption of technologies, and optimization of technological partnerships to enhance operational and financial efficiency.
Despite the setbacks, Capita remains vigilant in monitoring the Darknet for any signs of the stolen data from the cyber attack, with no new evidence found so far. The company continues to cooperate with the Information Commissioner’s Office (ICO) in the UK, responding to requests for various information.