Outsourcing firm Capita is channeling increased savings from cost reductions into AI innovation, aiming to boost margins and operational efficiency despite flat sales and sector pressures. The adoption of Salesforce’s Agentforce platform and the Capita AI Catalyst Lab highlight its shift towards tech-driven workforce renewal and service transformation.
Outsourcing giant Capita has announced plans to reinvest cash generated from recent cost-saving measures into artificial intelligence (AI) technologies as part of a broader strategy to improve operational efficiency and margins. The company, which administers the BBC licence fee among other public service functions, has maintained its forecast of “broadly flat” sales for the year but aims to deliver stronger margins through disciplined cost reductions.
Capita recently expanded its cost-cutting target to £250 million from an earlier £160 million goal, reflecting its increased confidence in efficiency gains primarily driven by AI adoption and voluntary staff departures. The company has so far achieved £185 million in annualised savings and is channeling much of this into AI initiatives. One notable project is the Capita AI Catalyst Lab, which has already identified over 200 potential AI use cases across the business, ranging from contact centres to local government services.
AI integration has reportedly brought tangible benefits, such as a 20% reduction in average handling times in contact centres, mirroring Capita’s intention to streamline both customer service and administrative tasks. Voluntary staff attrition, which stands at around 21% annually, especially in high-turnover roles like call centres, is expected to complement AI-driven efficiencies by reducing reliance on redundancies and facilitating workforce renewal.
Capita has also embraced Salesforce’s Agentforce AI platform, becoming the first UK business-to-business company to deploy this AI-powered recruitment system. This technology, set to launch within the summer, promises to cut recruitment time dramatically from weeks to hours by automating over 200 tasks in the hiring process. CEO Adolfo Hernandez highlighted the importance of this tool for their large-scale annual recruitment of approximately 10,000 staff, enabling recruiters to focus on final interviews and onboarding rather than early-stage screening.
Salesforce has rapidly expanded the adoption of Agentforce, securing over 1,000 paid deals worldwide and enhancing the platform with a new version, Agentforce 2dx. This upgrade brings capabilities such as embedding proactive agentic AI into workflows, multimodal experiences, and improved digital labour integration, which have already led to 40% faster case resolution and 25% higher lead conversion rates for clients. Industry analysts view these advancements as transformative, positioning AI to fundamentally reshape operational processes and customer engagement.
Despite a 4.5% decline in adjusted turnover for the five months ending in May—driven by a 21.1% drop in the contact centre segment due to weaker telecommunications volumes—Capita’s public service and regulated services divisions showed growth. The group secured £969 million in new contracts in that period, a notable 24% increase year-on-year. These contracts include significant deals like a £97 million training services contract for the Royal Navy, a £92.4 million extension with Southern Water, and a £107 million IT services agreement for Northern Irish schools.
Market sentiment remains cautious due to the competitive pressures in public sector outsourcing, but Capita’s renewed focus on operational discipline and technology investment could make it an appealing prospect. Market analyst Mark Crouch of eToro observed that while growth remains elusive, early signs of technological adoption bearing fruit might rekindle investor interest in the company.
Capita’s shares have responded positively, rising over 4% following the announcement and gaining around 25% over the past year, reflecting optimism that its AI-driven transformation strategy may deliver tangible results.
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Source: Noah Wire Services
Verification / Sources
- 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
- https://www.reuters.com/business/world-at-work/capita-roll-out-ai-powered-recruitment-this-summer-2025-06-11/ – Capita, a British outsourcing company, plans to launch an AI-powered recruitment system developed in collaboration with Salesforce Inc. this summer. The system, powered by Salesforce’s Agentforce AI, aims to significantly reduce recruitment time—from several weeks to just hours—by automating over 200 tasks across the hiring process. CEO Adolfo Hernandez highlighted that the company recruits about 10,000 staff annually and expects the AI tool to streamline early hiring stages, allowing recruiters to focus more on final interviews and onboarding. Capita is the first B2B company in the UK to deploy Salesforce’s Agentforce AI for such purposes.
- https://www.standard.co.uk/business/business-news/capita-eyes-ps250m-savings-from-ai-and-staff-leavers-b1200405.html – Outsourcing firm Capita has increased its cost-saving target from £160 million to up to £250 million, focusing on artificial intelligence (AI) and voluntary staff departures. The company plans to achieve these savings by enhancing the use of AI, including generative AI, to expedite certain tasks. For instance, AI integration in contact centres and local government services has already reduced average handling times by approximately 20%. Additionally, Capita anticipates that voluntary employee attrition, around 21% annually, will contribute to cost reductions, reducing the need for redundancies and balancing new hires.
- https://www.standard.co.uk/business/business-news/capita-raises-costsaving-target-as-it-turns-to-ai-to-drive-change-b1200498.html – Capita has unveiled new cost-cutting plans worth £250 million, aiming to achieve these savings through the use of artificial intelligence (AI) and voluntary staff departures. The company has increased its savings target from £160 million, focusing on AI to enhance efficiency. AI applications in contact centres and local government services have already led to a 20% reduction in average handling times. Capita also expects around 21% of its workforce to leave voluntarily each year, particularly in high-turnover roles like call centres, which will aid in achieving cost reductions and reducing the need for redundancies.
- https://www.reuters.com/technology/artificial-intelligence/salesforce-closes-1000-paid-agentforce-deals-looks-robot-future-2024-12-17/ – Salesforce has finalized over 1,000 paid deals for its AI-driven platform, ‘Agentforce,’ aimed at creating virtual representatives. CEO Marc Benioff highlighted enhancements in building bots for tasks such as recruiting and customer service, integrated with their messaging app Slack. He mentioned that the company’s AI applications have halved the number of humans needed for simple customer queries while planning to increase sales staff by over 10%. Benioff emphasized the impact of ‘digital labor’ on augmenting human work and expanding the economy. Salesforce is also preparing to launch a ‘robot force partner program’ to connect real-world and virtual machines.
- https://www.reuters.com/technology/salesforce-jumps-latest-ai-tools-set-accelerate-demand-2024-12-04/ – Salesforce’s shares surged 12.5% in premarket trading after the company exceeded quarterly sales estimates and announced a positive forecast for its new AI-integrated products. The key product, Agentforce, is expected to stimulate growth by leveraging increasing demand for AI agents capable of autonomously performing tasks. Despite its recent launch, Agentforce already secured 200 deals and has a strong prospective deal pipeline. Analysts are optimistic about its potential, even with the lengthy process of monetization. The company might increase its market valuation by over $40 billion if stock gains are sustained. Additionally, the company revised its fiscal year 2025 revenue expectations to between $37.8 billion and $38 billion. Third-quarter revenue increased by 8% to $9.44 billion, surpassing analysts’ expectations.
- https://www.reuters.com/technology/salesforce-launches-agentforce-2dx-with-new-capabilities-embed-proactive-agentic-ai-into-any-workflow-2025-06-12/ – Salesforce has launched Agentforce 2dx, an enhanced version of its AI platform, introducing new capabilities to embed proactive agentic AI into any workflow, create multimodal experiences, and extend digital labor throughout the enterprise. Companies using Agentforce have reported 40% faster case resolution times and 25% higher lead conversion rates, directly affecting revenue and customer retention. The platform aims to bridge the gap between AI adoption and clear ROI, offering pre-built workflows that deliver measurable impact quickly. While AI agents become embedded across business operations, they are expected to fundamentally reshape how teams engage with customers and partners.
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Notes: The narrative presents recent developments from Capita, including increased cost-saving targets and AI initiatives. Similar information has been reported in December 2024, with Capita raising its savings target to £250 million and highlighting AI-driven efficiencies. Although the article includes updated data, it recycles older material, warranting a high freshness score but still flagged for potential duplication.
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