Capita accelerates AI reinvestment after surpassing cost-saving targets

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1. https://www.dailymail.co.uk/money/markets/article-14819929/Outsourcer-Capita-earmarks-cost-savings-AI-war-chest.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 - Please view link - unable to able to access data
2. https://www.capita.com/news/capita-launches-ai-catalyst-lab-drive-ai-adoption-across-operations-and-transform-client - Capita plc has launched the 'AI Catalyst Lab', a dedicated team focused on identifying, testing, and scaling AI solutions that drive measurable business outcomes for both Capita and its clients. In just a month since its inception, the AI Catalyst Lab has identified a pipeline of over 150 AI use cases. The Lab has recently launched Capita’s high-volume recruitment accelerator, an AI-enabled recruitment automation built on Salesforce's Agentforce technology. This adds to two established flagship AI accelerators focused on document processing for government departments and road user charging. Capita is also working on a number of AI accelerators to address various industry needs, including contact centre transformation, learning and workforce development, citizen engagement platforms, collections and debt recovery, workforce management for BPO services, intelligent mailroom and document processing, fraud detection and compliance automation, and estate management and building safety compliance. This launch underpins Capita’s strategy of amplifying the impact of its human-centric processes with AI technology from world-leading technology providers such as AWS, Microsoft, Salesforce, and ServiceNow. With these partnerships, the Lab ensures that its AI solutions are scalable, secure, and industry-aligned.
3. https://www.standard.co.uk/business/business-news/capita-raises-costsaving-target-as-it-turns-to-ai-to-drive-change-b1200498.html - Outsourcing firm Capita has unveiled fresh cost-cutting plans worth £250 million as it targets savings from the use of artificial intelligence (AI) and staff leaving voluntarily. Shares in the firm were down by a tenth on Tuesday after it hiked its savings target from a previous £160 million. Capita is a major contractor for the Government and local authorities, and also manages the licence fee for the BBC and runs recruitment for the British Army. The company said it had spotted more opportunities to cut costs and make the organisation more efficient. Part of this is set to come from it ramping up the use of AI, including generative AI, to speed up certain tasks. This includes the use of AI for its contact centres and local government customers, which has already resulted in average handling time reducing by around a fifth, Capita said. It also revealed early signs that adoption of the technology had helped it to win new customer contracts. Furthermore, Capita said it sees voluntary employee attrition – meaning when staff choose to leave the company – of about 21% each year. This reflects the natural movement of people such as in call centre support roles where there tends to be a higher average turnover. But Capita said it will help contribute to its savings target, reducing the need for redundancies and ensuring it can balance the level of new hires. It is understood that the firm could decide not to replace about 1% to 2% of roles after staff leave. Last year, it announced plans to cut around 900 jobs as part of the cost-reducing plan. Capita also revealed that it was expecting about a £20 million annual hit from the rate of employer national insurance increasing next year, but that it expects additional savings to offset these costs.
4. https://www.standard.co.uk/business/business-news/capita-eyes-ps250m-savings-from-ai-and-staff-leavers-b1200405.html - Outsourcing firm Capita has hiked its cost-saving target as it expects to shed around a fifth of staff who leave voluntarily while ramping up the use of artificial intelligence (AI). The major contractor for the Government and local authorities, which employs about 41,000 people around the world, raised its savings target from £160 million to up to £250 million on Tuesday. It said part of this had been achieved by increasing the use of AI, including generative AI, to speed up certain tasks. This includes the use of AI for its contact centres and local government customers, resulting in average handling time reducing by around a fifth, Capita said. It also revealed early signs that adoption of the technology had helped it to win new customer contracts. Furthermore, Capita said that voluntary employee attrition – meaning when staff choose to leave the company – of about 21% will contribute to the savings target and reduce the need for redundancies. Capita also revealed that it was expecting about a £20 million annual hit from the rate of employer national insurance increasing next year, but that it expects these costs to be mitigated by other savings.
5. https://www.capita.com/news/capita-partners-artificial-transform-insurance-market - Capita has joined forces with Artificial to deliver disruptive insurance technology that digitises the end-to-end insurance lifecycle, reducing manual processes and making insurance frictionless. Artificial provides digital solutions to clients across the insurance sector, enabling them to leverage new technology to improve their internal processes, price more accurately, and deliver exceptional user experience. Following extensive due diligence, Capita’s corporate venture unit, Capita Scaling Partner, selected Artificial for investment and will provide a dedicated business development team to enable Artificial to scale rapidly and deliver their digital solutions to retailers and insurers globally. Artificial’s digital solutions strengthen Capita’s existing insurance offering and open new distribution channels for clients to increase provision across customer bases. The solutions create a digital customer journey with straightforward purchasing and claims processes. It harnesses machine learning to increase the accuracy of risk pricing and enables rapid claims resolution through automation. The company is run by a world-class team of data scientists, software engineers, and insurance industry experts with a strong delivery track record.
6. https://www.the-independent.com/business/capita-moving-at-pace-with-cost-cutting-amid-overhaul-b2709247.html - The group’s action to slash costs helped it post a £116.6 million pre-tax profit in 2024, against losses of £106.6 million the previous year, despite an 8% drop in revenues. On an underlying basis, Capita reported earnings rising 5.5% to £95.9 million. Capita hiked its cost reduction target in December to £250 million by the end of 2025, up from £160 million, revealing it was aiming to drive savings from the use of artificial intelligence (AI) and staff turnover. Capita – a major contractor for the Government and local authorities which also manages the licence fee for the BBC and runs recruitment for the British Army – has been accelerating the use of AI and generative AI to speed up certain tasks. Last year, it announced plans to cut around 900 jobs as part of the cost-reducing plan, but is also looking to deliver some of the extra savings through staff turnover, which was at a rate of 21.7% at the end of last year. The group said cost cutting will help drive a “small increase” in its profitability over the year ahead, but that underlying revenues will be “broadly in line” with 2024. Chief executive Adolfo Hernandez said it had been a “transformative year” for the group, but admitted it had been a tough 2024 for its employees during the overhaul. “With a major ongoing transformation programme, and many difficult decisions around pay reductions and reorganisation, this year was understandably difficult for our people,” he said. Capita is focusing on technology to help drive its turnaround, including the use of AI for its contact centres and local government customers which has already resulted in average handling time reducing by around a fifth. It has also revealed early signs that adoption of the technology had helped it to win new customer contracts. It said it had £5 billion of contract opportunities in the pipeline underpinned by AI and technology. Mr Hernandez said: “On joining the business a year ago, it was clear to me from my time in the technology industry that AI brings the potential to revolutionise how we deliver services to our customers. “Everything we have seen since has only strengthened that belief. “It was also clear that we needed to do much more to bring our costs down to enable the company to be more competitive. “Today’s results show progress on both fronts.” At the end of last year, it has already achieved £140 million of annual cost savings targets. Efforts to ramp up savings will also help the group offset a £20 million annual hit of increased national insurance contributions from April.
7. https://www.marketscreener.com/quote/stock/CAPITA-PLC-4007375/news/Capita-FY-2024-results-Prelim-2024-20250304-FINAL-49241311/ - In the Contact Centre business, we have developed AgentSuite: a cutting-edge gen AI customer experience solution comprising two components, Agent Assist and Call Sight. These provide real-time sentiment analysis, AI-generated prompts to aid call handlers and reduce post-call administration time with automatically populated call notes. In the Contact Centre business, around 50% of agents are now utilising AI and gen AI technology in their day-to-day roles. Within our Pension Solutions business, we are transforming user experience with the creation of our new digital pensions platform. Incorporating technology from Microsoft Dynamics and Amazon Connect, it will provide an improved and fully personalised experience for the pension member. This product will become part of our core offering for all future pension administration contract tenders. We are also standardising and centralising high-volume, low-complexity sales processing across the Group through an enabling optimised sales (EOS) project. This will result in a scalable platform, integrated with Salesforce, to drive business value and aid growth in the long term. In addition, I am very pleased with our recent announcement in January 2025, that the Group would be one of the first companies in Europe to use Salesforce's Agentforce AI for complex business tasks. Agentforce is a sophisticated AI system that creates 'Agents' capable of performing automated tasks and engaging in user conversations. Our initial release will introduce the Capita Career Assistant, an AI bot to aid our recruitment process, helping potential applicants find suitable jobs, and automating parts of the hiring process like matching skills, screening applications, scheduling interviews, and updating records. Through 2025, this solution will expand upstream to address additional steps in high-volume recruitment. For an organisation like Capita that hires around 10,000 colleagues each year, this offers significant quality, speed, cost, and candidate experience benefits. It is our intention to deliver this managed platform to customers who face similar challenges with high-volume recruitment. We know our customers entrust us to hold, manage and process some of their most valuable and sensitive data and we are taking a responsible approach to AI to deliver leading and safe AI solutions working with trusted partners with appropriate governance as we continue to invest in our cyber security across the year.