Following a strategy review of its business, the firm has decided to focus on the core sectors of justice & immigration, defence, transport, citizen services, and healthcare.
“These are businesses which we are really good at, where we deliver outstanding service, and where our skills, experience and international reach can differentiate us,” said chief executive Rupert Soames.
It has already begun the process of disposing of businesses that are not part of its core future strategy, including the majority of its private sector business process outsourcing capabilities.
Serco also announced a warning that its profits for 2014 will be reduced by around £20m, while its outlook for 2015 was also reduced.
The firm proposed an equity rights issue of up to £550m during the first quarter of 2015.
"Looking ahead, we have not yet completed our strategy review, and we will present it, as planned, at the time of our full year results in March 2015,” Soames added. “However, the direction is clear: Serco will concentrate on its core as a leading supplier of public services.”