Teleperformance shares plunge on AI disruption concerns

By Danilo Masoni, Stephanie Hamel and Augustin Turpin

MILAN (Reuters) -Teleperformance shares plunged to a 7-year low on Wednesday over concerns artificial intelligence (AI) will disrupt the French call centre firm's business.

Two traders and a Midcap Partners analyst linked the drop to a statement by Swedish fintech company Klarna which spoke of a boost to its results from its AI customer service assistant, powered by Open AI.

Teleperformance shares were down 19% to 107.9 euros in Paris at 1415 GMT, off lows for the day but still on track for their largest one-day decline since November 2022.

The shares had fallen as much as 29.3% at one point on Wednesday, hitting 94.28 euros, their lowest level since December 2016.

The company sought to reassure investors with a statement in response to the share price slide and said it would announce financial results as planned on March 6.

"(Our) current activity in no way reflects negative conclusions in its business that could be drawn from technological developments mentioned in this communication," the group's management said in their press release.

Teleperformance also pointed out that artificial intelligence is already deployed in solutions it offers, and that it continues to develop R&D programs internally and in partnership with technology companies.

Klarna said in a release its AI assistant has handled two thirds of its customer service chats since it was launched a month ago.

The group added that its assistant is doing the equivalent work of 700 full-time agents and is more accurate in errand resolution, leading to a 25% drop in repeat inquiries.

As a result, the Swedish company forecasts a $40 million boost to profit in 2024.

Teleperformance started 2023 with a strong push towards generative AI, announcing that 20% to 30% of its activities would be automated within the next three years, before downplaying expectations due to a limited response to the new technology from clients.

In 2023, analysts had already pointed to Teleperformance as a company that might be vulnerable to the disruptive effects of AI. ($1 = 0.9236 euros)

(Reporting by Danilo Masoni, Augustin Turpin and Stéphanie Hamel; Editing by Amanda Cooper, Sharon Singleton and Keith Weir)