Capita accelerates AI investment amid major cost-cutting

In the United Kingdom, Capita has actively pursued a strategy to enhance its operational efficiency while investing in artificial intelligence (AI). The company reported a savings of £185 million so far, as part of its broader objective to achieve £250 million in annual savings by the end of 2025. As part of this initiative, Capita announced that it would reinvest a portion of these savings back into new AI technologies to stay competitive and future-proof the business. The introduction of various AI products has begun, including collaborations like Salesforce's Agentforce designed for large-scale recruitment. The use of AI is becoming critical for Capita, as they have identified over 200 potential use cases for this technology across their operations. The rollout includes five new products already launched, with an additional five in detailed testing. Amid a decline in sales—down 4.5% in the five months to May 31—there has been a marked shift toward developing AI-enhanced services aimed at improving customer engagement. The need to adapt to a rapidly evolving technological environment is crucial, given the heightened interest from clients in AI-driven solutions. Adolfo Hernandez, the CEO of Capita, has emphasized the company's commitment to investing in AI, indicating that customer interest in AI technology has surged exponentially. Capita's operational adjustments come in response to the challenging market conditions, particularly in its contact center outsourcing division, which faced a significant 21% slump in sales during the initial five months of the year. This decline was partly due to contract losses and decreased demand in the telecoms sector, highlighting the urgency for Capita to innovate its service offerings. Recognizing the importance of maintaining a strong operational margin while being conscious of costs, Capita is also focusing on enhancing its workforce capabilities through staff turnover of 21.7% at the end of the previous year. Efforts to streamline operations involved plans to reduce around 900 jobs, though the organization is relying on workforce adjustments alongside AI to achieve its cost-cutting targets. These strategic moves aim to strengthen Capita’s financial foundation while ensuring its services remain relevant in a competitive landscape.