Shares of call centre companies Concentrix Corp. and Teleperformance SE fell sharply on Tuesday after Concentrix cut its revenue outlook and warned that some customers are reducing spending, intensifying fears that artificial intelligence is making the industry obsolete. RBC Capital Markets analyst Karl Green described the sub-sector as 'uninvestible' in a note to clients.
Concentrix and Teleperformance Suffer Double-Digit Losses
Concentrix sank as much as 24% in early trading in New York, while French firm Teleperformance tumbled as much as 16% to its lowest level in more than a decade. The selloff extended a broader decline in software and business services stocks this year, driven by investor concerns that AI systems are cheaper and faster than traditional call centre operations.
Concentrix lowered the mid-point of its fiscal 2026 revenue outlook range by about US$130 million. During a post-earnings conference call, executives outlined several scenarios in which clients have cut call centre spending. Some are moving work offshore more rapidly to reduce costs, while others may eliminate support for high-cost markets entirely, according to chief executive Chris Caldwell.
Clients Withdraw Support Amid AI Shift
“We are definitely seeing increased financial pressure on our clients as they try and cope with their own investment needs and their current operating environments,” Caldwell said. RBC's Green highlighted that “the biggest negative in our view is the comment that some clients have simply withdrawn customer support altogether in some areas.”
The worry among investors is that call centre business models will struggle to compete against cheaper and faster AI systems. Customers are allocating a larger portion of IT budgets to firms like OpenAI and Anthropic, which provide generative AI tools that can handle customer service tasks.
AI Shrinking Demand Faster Than New Services Expand
“Concentrix reinforced concerns that AI is shrinking demand for its core customer-experience outsourcing business faster than higher-value AI services are expanding,” said Bloomberg Intelligence analyst Tamlin Bason. Concentrix operates in 483 locations across 74 countries and served more than 160 Fortune Global 500 companies as of end-November, according to its latest annual report.
The selloff reflects a growing conviction among investors that traditional call centre operators face an existential threat from AI, with the sector now widely viewed as uninvestable by many market participants.
