Shares in Teleperformance, the French business process outsourcing firm listed in London, tumbled more than 12% in early trading on Thursday after the company issued a cautious trading update. The stock was the heaviest faller on the FTSE 100, dragging the index 0.6% lower to 8,215 points by mid-morning. Investors reacted sharply to signs that client spending remains under pressure and that artificial intelligence is increasingly eating into the traditional call centre market.
In its quarterly statement, Teleperformance pointed to “more selective spending” by major clients, particularly in the technology and e-commerce sectors. The company also acknowledged that generative AI tools are being adopted faster than expected for routine customer queries, reducing the need for human agents. Although Teleperformance has launched its own AI-augmented services, analysts at Citi said the update “reinforces the structural headwinds facing the sector” and trimmed their price target.
The sell-off comes after a turbulent 12 months for outsourced customer service firms, as businesses worldwide reassess their cost bases and explore automation. Teleperformance had previously attempted to reassure markets by pivoting toward higher-value services such as fraud detection and digital content moderation. However, today’s statement suggests the pace of AI disruption is outstripping those efforts for now.
For UK investors, the decline is a reminder of the vulnerability of certain FTSE 100 constituents to technological change. Teleperformance is held by several large pension funds and income-focused portfolios, having been a reliable dividend payer. The stock now trades at roughly 12 times forward earnings, a discount to its five-year average, but some analysts caution that valuation could fall further if client budgets tighten again.
Broader market sentiment was also subdued on Thursday, with the FTSE 250 slipping 0.3%. The domestically focused index was weighed down by weakness in support services and tech stocks. Sterling held steady against the dollar at $1.28, offering little relief to multinational earners like Teleperformance that report in euros.