The group - which ditched its chief executive a year ago following an earlier string of profit alerts and demotion from the FTSE 100 - said new boss Jonathan Lewis was demanding "significant change" as the business had become too complicated and burdened by costs.
In the latest blow to the outsourcing sector, Capita's new boss unveiled a radical overhaul of the group's finances, giving a damning assessment of a company that he said had become "too complex" and lacking in discipline.
Around 1500 GMT in London, Capita shares traded down 43.37 percent at 196.95 pence, compared with the closing value on Tuesday. The firm has also said it won't pay a dividend to shareholders this year.
It employs 73,000 people and operates primarily in Britain over hundreds of separate contracts.
Capita has not been alone in facing a series of challenges in the outsourcing sector. "Capita needs to change its approach".
Jon Trickett, Labour's shadow minister for the Cabinet Office, said: "We can not afford another Carillion".
The shake-up would also involve selling non-core businesses, including ParkingEye and Constructionline, with Capita warning that the cost measures would not be enough to help shore up 2018 full-year profits which were now forecast to come in between £270m and £300m.
Capita, an outsourcing firm with a substantial involvement in government contracts, saw its shares plunge more than 40% on Wednesday after the FTSE 250-listed firm issued a profit warning, announced plans for a rights issue, and suspended its dividend in a single announcement.
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Carillion, which built large infrastructure projects, was largely brought down by problems on a number of its construction contracts and not the day-to-day provision of services.
It provides procurement and supply chain management services to the industry.
Capita, meanwhile, did not specify which contracts were problematic but pointed to a lower number of new contracts being awarded for smaller amounts, in a more sluggish business operating environment.
Commenting on Capita's update Neil Wilson, senior market analyst at ETX Capital, said: "New CEO Jonathan Lewis is having a proper clear out to fix the business before it heads the way of its erstwhile peer".
Capita has underinvested in the business and there has been too much emphasis on acquisitions to drive growth.
It added that, in addition to its annual contribution, it was committed to an additional contribution of £21m in 2018 and would seek to "reduce the remaining deficit as a priority".
Capita said it was undertaking a triennial review of its pension scheme and expected its pension deficit to come in below the £381m announced last summer.