Outsourcing Giant Capita Replacing Thousands Of Jobs With Robots

Earlier this week we warned that as the trend to robotization accelerates, millions of (mostly) low-skilled American jobs will be lost in the next five years, replaced by robots as companies seek to maintain high profit margins in a time of rising wages and growing inflation. One company, however, can not wait that long.

British outsourcing giant Capita, a company whose contracts include collecting the BBC license fee, is preparing to fire thousands and replace them with robots after clients cut spending following Brexit vote in a move some fear will be repeated across the country, leading to more than 1 million job losses according to the Guardian. Capita, a FTSE 100-listed firm that also runs the London congestion charge, said it needed to axe 2,000 jobs as part of a cost-cutting drive in response to poor trading. The company said it would use the money it saved to fund investment into robotic workers across the whole company.

The announcement has led to more concerns the world is a facing fourth industrial revolution powered by artificial intelligence (AI) which will result in unprecedented job losses.

According to RT, a study published by Oxford University and consultancy firm Deloitte in October predicted there is a 77 percent probability Britain will lose 1.3 million “repetitive and predictable” administrative and operative jobs within 15 years. More than 850,000 public sector jobs – including teachers, social workers and even police officers – could also be replaced by computer programs. British MPs warned in October the government is unprepared for the coming technological revolution; the same can be said about the US.

The Science Technology Committee said the government’s role in preparing for the impact of AI is “lacking” and cautioned that “science fiction is slowly becoming science fact, and robotics and AI look destined to play an increasing role in our lives over the coming decades.”

Capita saw its shares drop to a 10 year low at one point following its December statement, in which the company announced it would be selling off assets and trimming costs to protect its balance sheet after Brexit. The company will use robots to help eliminate human error and make decisions faster, said chief executive Andy Parker. Parker is in no immediate danger of being replaced by a robot: his salary rose nine percent to £600,000 (US$756,000) this year, according to Unite the Union.

“It doesn’t remove the need for an individual but it speeds up how they work, which means you need less people to do it,” he said in the statement. Parker added that a human assisted by robotic technology could do a 40-minute job in much less time.

“They can then do 10 times the amount they used to, so you need less people to do the same amount of work.”

Rehana Azam, national secretary for public services at the GMB union, said in a statement, “Public services are predominantly delivered by people so it’s hard to see how they’re going to provide a cost-efficient service from call centers in another country."

“We’d want to sit down with Capita and make sure people are treated fairly in any process that ends with them losing jobs.

“We’ve never had a good track record with private providers delivering computerized systems. I’d like to see where there have been good examples of that kind of automation.”

Capita has struggled as its clients, which include O2, M&S, John Lewis and Dixons Carphone, have looked to cut costs in areas such as corporate travel and recruitment. The company refused to blame the Brexit vote for the disappointing update but said earlier this year that uncertainty over the UK’s relationship with the European Union had hit its business, delaying key contracts.

The broader implications are clear: economists expecting a cyclical increase in wages, especially among menial low-skilled jobs, will be very disappointed.


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