Post Office scandal stained Fujitsu orders staff to cut costs amid widening UK losses

Fujitsu has informed staff of cost-cutting measures it has put in place as it faces challenges amid its much-publicised involvement in the Post Office Horizon scandal.

Prior to the festive period, UK staff were sent a memo instructing staff on aggressive cuts to spending on travel, recruitment, social and external organisations.

The impact of the Horizon scandal on Fujitsu has been significant. In January 2024, following ITV’s dramatisation of the scandal, the supplier agreed with the government to cease bidding for new public sector contracts until the public inquiry into the scandal completed its work.

In its latest financial statement for the 12 months to March 2024, the company reported a loss of just over £170m, compared with a loss of £99m in the previous 12 months.

This period covers up to few months after Fujitsu stopped bidding for public sector work, so the situation could get worse. Sales continued to fall during the year, and Fujitsu may also need to contribute to the cost of compensating victims of the scandal it was partly responsible for.

In its statement to Companies House, under the Risks section, Fujitsu said: “The extent of reputational and financial risk will not be known until the inquiry has concluded and published findings. Based on these findings, the company expects to take appropriate and proportionate measures to engage with the UK government with respect to a contribution towards the UK government’s compensation schemes.

“Loss of future new business due to the reputational damage arising from the Horizon inquiry remains a key risk to the company’s business plans.”

The company is preparing for the worst. Just before Christmas, its UK management team sent staff a memo detailing measures to keep costs down.

The company, which said its UK business spends about £10m a year on staff travel, told UK staff that all domestic travel to internal meetings and events should be avoided, with Microsoft Teams to be used for meetings unless “it would have a significant negative impact on the meeting”. It told staff that international travel should not be taken unless “directly related to customer activity”.

The company also outlined its preference for roles to be filled internally before recruiting externally. “We will continue with our principle of seeking to fulfil approved roles with current Fujitsu colleagues,” it told staff. “We will recruit externally to fulfil customer requirements, but only after considering internal moves, including promotions.”

It said all current contractors are being reviewed, including current open requirements: “Where possible, we will be seeking to replace contractors with current Fujitsu colleagues.”

The company is also putting strict controls on spending on companies outside Fujitsu, with preapproval from the UK leadership team needed for spending over a certain amount.

Fujitsu is also tightening the purse strings for staff social events, asking those who have not already scheduled or held a team social to consider delaying until the new financial year after 31 March.