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.
The business reported that revenues, on a like-for-like basis, were about 8% lower in the 11 months to the end of November, compared with the previous year.
This was partly driven by contract losses announced last year and delays in kickstarting two new contracts, Capita said.
