LAUNCH OF THE "LEAP!" TRANSFORMATION PROGRAMME

The Cap Gemini Ernst & Young Group is launching a transformation programme aimed at adapting its organization to the new market conditions.

This plan, named "LEAP!", revolves around four axes: the motivation of people (Leadership), sales development (Expansion), simplification of operations structures (Alignment) and business portfolio management and productivity (Portfolio & Productivity Management).

Between 1995 and 2000, companies were rapidly and heavily investing in IT (Year 2000, euro, Internet.). They are now giving priority to making those investments profitable. Although the market still demands consulting and IT services, these sectors are experiencing a different kind of price and competitive dynamics, in particular with strong price pressure in IT services.

The Group, which has already streamlined its budget and reporting processes, is now launching a simplification of its organization, aimed in particular at energizing its sales activity in its 3 main markets: consulting, IT and outsourcing.

Simplifying the operational approach will enable better skills management in line with appropriate economic models while developing the Group's capacity to deploy those skills for its clients. This new organization should lead to trimming non client-facing headcount, up to 3,000 positions. The Group will strive to provide sales or delivery positions for most of the people concerned.

Beyond the implementation of these new organization principles, the LEAP! program will aim to boost our sales, remotivate people and reinforce our productivity and cost reduction efforts.

To implement this transformation, Paul Hermelin, Group Chief Executive Officer (C.E.O.), is empowering a new generation of managers and restructuring the Group's leadership team with the appointment of a Chief Operating Officer (C.O.O.), Alexandre Haeffner, and the implementation of a reduced Executive Committee.

This new generation is particularly well represented by the appointment of Mark Hauser at the helm of North America, Paul Spence in the United Kingdom & Ireland and Paul Thorley in Asia Pacific. The corporate management team is strengthened by Paul Cole, who will become Sales Director and Head of the "LEAP!" program, and John McCain, former member of the Executive Committee of EDS and, as of October 1^st, 2002, Deputy to Alexandre Haeffner.

In addition, in order to reach 2002 utilization rate objectives (73%), an immediate headcount reduction is being carried out to enable short-term operating margin recovery. This involves 2,500 positions, mainly in the telecoms and financial services sectors.

The combination of these actions, together with the "LEAP!" programme, will enable CGE&Y to restore profitability and market success.

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