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Teleperformance: The Story of the World's Call Center Empire
I. Introduction: The €400 High and the AI Reckoning
On a crisp January morning in 2022, Teleperformance's share price hit €402 intraday—a staggering 31-fold increase from its autumn 2011 low of €13. After a low of €13 on an autumn evening in 2011, the share embarked on a frenzied rise. Put simply, Teleperformance racked up 10 consecutive years of gains. On 4 January 2022 came the apotheosis: €402 intraday, after a 31-fold increase in the share price. People didn't know it yet, but that was the first and last time the stock would cross the €400 threshold.
The company that reached this pinnacle was no Silicon Valley darling—it was a French multinational born in Paris's 15th arrondissement, built by a 25-year-old economics graduate who believed the humble telephone could revolutionize commerce. Daniel Julien founded Teleperformance in 1978 at the age of 25, having graduated from the University of Paris where he majored in Economics. Starting with just 10 telephone lines in an office in Paris, Julien methodically constructed what would become the world's largest customer experience company—It operates in 91 countries and serves 170 markets. Today it is the largest company in this specific sector in the world.
But the symbolic milestones that followed January 2022 would come in the opposite direction. The symbolic milestones would keep passing, but in the opposite direction. €300 in 2022. €200 in 2023. €100 in 2024. €70 in 2025. Then €60 just a few days ago, taking us back 11 years.
The central question that haunts Teleperformance—and every investor contemplating the BPO sector—is this: How did a 25-year-old with ten telephone lines in Paris build the world's largest customer experience company, and can it survive the artificial intelligence revolution?
OpenAI launched its revolutionary conversational app ChatGPT on 30 November 2022. Very quickly, it became apparent that some of the tasks performed by companies like Teleperformance could be replaced by AI. That little tune dragged down the share's performance in 2023.
The themes woven through Teleperformance's nearly five-decade journey illuminate the opportunities and perils of modern global capitalism: founder-led persistence over generational timeframes, the relentless arbitrage of global labor costs, M&A as both sword and shield, and now the existential question of whether 490,000 human workers can coexist with machines that increasingly speak, listen, and resolve customer issues with startling proficiency.
For investors, the Teleperformance story offers a masterclass in how seemingly unglamorous service businesses can compound wealth—and how technological disruption can eviscerate valuations in a matter of months. By the way, the stock trades at an average of 26x earnings over 10 years, which is a tad more than Apple over the same period. However, Teleperformance went from a ridiculously high level in 2020 (50x) to an extremely low one in 2024 (9.5x).
II. Founding Story: The Vision of Daniel Julien (1978–1985)
Picture Paris in June 1978: the echoes of May '68 had faded, disco dominated the airwaves, and most Europeans still viewed telephones as instruments for personal calls rather than commercial tools. Into this analog world stepped Daniel Julien, a freshly minted economics graduate from the University of Paris-Nanterre, with a vision that seemed almost quaint in its simplicity.
At just 25 years old, Julien, armed with an economics degree from the University of Paris, identified an opportunity in the emerging field of third-party call center assistance. He launched the company with a modest setup of only ten telephone lines. His initial vision was to use the telephone as a commercial and marketing tool to improve the efficiency of sales and service processes for businesses.
The company's origins reveal something essential about Julien's character: a blend of pragmatism and romanticism that would define Teleperformance's expansion strategy for decades. In interviews, he has described himself as obsessed with one historical figure since childhood—Marco Polo, the Venetian merchant who bridged East and West through commerce and curiosity. This wasn't mere intellectual fascination; it was a blueprint for empire-building.
The company's early business model centered on providing outsourced customer relationship management (CRM) services. This was a novel concept in France at the time. While American companies like AT&T had experimented with centralized customer service operations, the idea of outsourcing such functions to specialized third parties was virtually unknown in Europe. Julien saw what others missed: as telecommunications infrastructure improved and business volumes grew, companies would increasingly need professional intermediaries to handle the human connection with customers.
The early years demanded resilience. Julien described the initial vision plainly: "Forty years ago, it was another world because it was one with fixed lines and no online data. The initial vision was simply to use the telephone to help to communicate better and get additional sales."
The company began by providing customer service to major players in the French automotive industry, then expanded into developing yearly customer satisfaction barometers. "Teleperformance started to provide customer service for some major players in the car industry in France. Then, we began to develop yearly customer satisfaction barometers to help companies better serve their clients and identify where they could improve."
The breakthrough came faster than most startups dare to dream. Starting with just ten telephone lines in an office in Paris, in 1985 he succeeded in growing Teleperformance to the number one position on the French market. In seven years, Julien had transformed a tiny operation into the dominant player in the nascent French call center industry—a feat that demonstrated both the market opportunity and Julien's operational prowess.
What made this rapid ascent possible? Julien believed deeply in process. As he would later articulate, "The major strength of our company is also the process... At Teleperformance, everything that makes the machine work smoothly is recorded and written down, and I'm convinced that it's one of our greatest strengths – an edge we still have on our competitors."
For investors examining Teleperformance today, the founding story matters because it reveals the company's DNA: obsessive focus on operational excellence, founder-led ambition tempered by methodical execution, and a willingness to see global opportunity where competitors saw only domestic markets. These traits would prove essential in the decades ahead.
III. European Expansion & The Partnership with Berrebi (1986–1998)
If the first phase of Teleperformance's story was about proving the concept in France, the second phase was about exporting it across Europe—and finding the financial architecture to support global ambitions.
In 1986, Teleperformance established international subsidiaries in Belgium and Italy. These weren't random choices. Belgium offered proximity to major European institutions and multilingual capabilities, while Italy represented a large consumer market where customer service was still primitively organized. Two years later, it established subsidiaries in Spain, Germany, Sweden and the United Kingdom.
The European Union's ongoing integration provided the tailwind. As borders opened and cross-continental commerce expanded, multinational companies needed partners who could handle customer inquiries across multiple markets and languages. Teleperformance positioned itself as that partner—not just a French call center operator, but a pan-European customer experience network.
The pivotal year was 1989. Julien and Jacques Berrebi joined forces to head Rochefortaise Communication, the parent company of Teleperformance International, which then listed on the Paris Stock Exchange.
Jacques Berrebi brought something Julien lacked: deep financial sophistication and access to capital markets. The partnership created a dual leadership structure that would define Teleperformance for decades. Julien focused on operations and strategy; Berrebi handled finance and investor relations. This complementary arrangement proved remarkably stable—Jacques Berrebi ended all operational duties in January 2009 and returned in 2012, at the age of 70.
The Paris Stock Exchange listing transformed Teleperformance from an entrepreneurial venture into a publicly accountable institution. Access to equity capital enabled the aggressive expansion that followed, while the discipline of quarterly reporting forced operational rigor across the growing empire.
By 1995, the strategy had produced remarkable results: Starting with just 10 telephone lines in an office in Paris, he succeeded in growing Teleperformance to the leading position in the French market by 1985 and number one in the European market in 1995.
The decade from 1986 to 1995 established patterns that would persist throughout Teleperformance's history: organic expansion into new geographies, followed by acquisitions to accelerate market share gains, all financed by a public equity structure that provided both capital and credibility.
For investors, this phase illustrates how the company learned to scale. The European expansion wasn't about replicating a French model verbatim—it required adapting to local labor regulations, languages, and business cultures while maintaining operational consistency. This capability would prove essential when Teleperformance turned its attention westward.
IV. The American Gamble & Global Scale (1992–2006)
The United States represented the largest prize and the greatest risk. American companies had pioneered the call center concept, and homegrown competitors possessed deep relationships with domestic clients. For a French company to succeed would require more than geographic expansion—it would demand cultural fluency in the world's most demanding corporate marketplace.
In 1992, Teleperformance USA was established, and Asia-Pacific contact centers were set up in the Philippines and Singapore in 1996.
The timing proved prescient. American corporations were increasingly recognizing that customer service represented both a cost center to be managed and a competitive differentiator to be cultivated. The 1990s saw the rise of 1-800 numbers, automated phone trees, and the first experiments with offshore delivery—trends that created opportunities for well-capitalized providers with global capabilities.
Julien understood that simply opening American offices wouldn't suffice. The company needed deep roots in North American business culture. In a striking demonstration of commitment, Julien himself relocated to Florida, making it his adopted home for over fifteen years. "His lair is Florida – his adopted home for the last fifteen years – and his passion is… call centers."
The Latin American expansion followed logically. From 1998 through 2002, Teleperformance established presence in Argentina, Brazil, and Mexico—markets that offered Spanish and Portuguese language capabilities for serving U.S. Hispanic populations, along with cost structures that made nearshore delivery economically attractive.
A defining acquisition came in 2006 when Teleperformance USA purchased AOL's 400-employee call center in Ogden, Utah. This wasn't just about adding capacity—it was about acquiring relationships with one of America's most iconic internet companies during a period when digital transformation was creating explosive demand for customer support services.
The corporate restructuring of 1999-2006 consolidated the sprawling international operations. In 1999, Rochefortaise Communication merged with Teleperformance International to form S.R. Teleperformance, which later became Teleperformance in 2006. The company's focus on digital transformation began to take shape, with the launch of its first digital interaction platform in 2006.
Throughout this period, Julien maintained what he called the "50/50 Growth Philosophy"—a balanced approach that would characterize Teleperformance's expansion strategy across all markets: "We always have managed our growth with 50 percent organic growth and 50 percent acquisition. Our organic growth has consistently been greater than the growth of the market."
This philosophy reflected a sophisticated understanding of competitive dynamics. Organic growth demonstrated that clients valued Teleperformance's services enough to expand their relationships. Acquisitions accelerated market share gains and brought capabilities that would take years to develop internally. The combination created a flywheel effect: scale enabled investments in technology and training, which improved service quality, which attracted more clients, which funded further expansion.
By 2006, Teleperformance had transformed from a European leader into a genuinely global player—In 2015, it reported consolidated revenue of €3.4 billion ($3.7 billion, based on €1 = $1.11). The Group operates 147,000 computerized workstations, with close to 190,000 employees across 311 contact centers in 65 countries and serving more than 160 markets.
For investors, the American gamble paid off handsomely. The U.S. market became Teleperformance's largest, and the global infrastructure created during this period positioned the company for the acceleration that would follow.
V. Key Inflection Point #1: The 2008 Centralization & Acquisition Spree (2007–2014)
The global financial crisis of 2008 might have devastated a highly leveraged, rapidly expanding service company. Instead, Teleperformance used the crisis as an opportunity to restructure and accelerate—a pattern that would repeat during subsequent disruptions.
Daniel Julien and Jacques Berrebi centralized the group's operations and strategy in 2008. This was a pivotal time for the company, with Teleperformance Group's mission, vision, and core values evolving to meet new market demands.
The centralization was designed to eliminate redundancies across the global operation while maintaining local responsiveness. Regional fiefdoms gave way to standardized processes, shared technology platforms, and coordinated client management. This operational discipline would prove essential as the acquisition pace accelerated.
The acquisition spree that followed demonstrated Teleperformance's ambition to transform from a call center operator into a diversified business process outsourcing provider:
In 2007, Teleperformance acquired a 100% interest in Twenty4help, a European technical support company, and AllianceOne, a US-based accounts receivable management company. In 2008, the group's operations and strategy were centralized under the responsibility of Daniel Julien and Jacques Berrebi. The same year, Teleperformance acquired The Answer Group. In 2010, Teleperformance acquired Scottish outsourcing call center beCogent for ÂŁ35 million.
Each acquisition served strategic purposes beyond simple revenue addition. Twenty4help brought technical support capabilities that complemented traditional customer care. AllianceOne added debt collection services—a higher-margin business that proved counter-cyclical during recessions. BeCogent strengthened the UK presence.
The pattern continued: In 2013, Teleperformance acquired full control of TLS Contact. In 2014, Teleperformance acquired Aegis USA Inc., an outsourcing and technology company in the United States, the Philippines and Costa Rica.
TLS Contact deserves particular attention. The company managed visa application services for governments—a specialized, high-margin business with significant barriers to entry. Unlike traditional call center work, visa processing required security clearances, governmental relationships, and operational competencies that couldn't be easily replicated. This acquisition planted seeds for what would become Teleperformance's "Specialized Services" segment.
Aegis USA represented another expansion of the core business, adding capacity in key markets and diversifying the client base. The Philippines operations were particularly valuable as offshore delivery became increasingly central to industry economics.
This phase illustrated Teleperformance's ability to identify, execute, and integrate acquisitions while maintaining operational performance. Many companies attempt aggressive M&A strategies; few execute them successfully over extended periods. Teleperformance's track record during 2007-2014 demonstrated institutional capabilities that would prove essential for larger deals ahead.
For investors, the 2008 centralization created the operating platform for the decade of explosive growth that followed. The acquisition discipline—buying companies that extended capabilities or accelerated market share, rather than empire-building for its own sake—provided confidence that capital would be deployed productively.
VI. Key Inflection Point #2: The LanguageLine Transformation (2016)
August 22, 2016 marked a before-and-after moment in Teleperformance's history. On August 22, 2016, French call center behemoth Teleperformance announced the acquisition of Monterey, California-based LanguageLine Solutions for an impressive USD 1.522bn. Abry Partners had bought LanguageLine in 2004 for USD 720m.
At $1.5 billion, LanguageLine represented by far the largest acquisition in Teleperformance's history—and the largest transaction in the language services industry to date. The deal's strategic logic was compelling: "It is a superb organization that supports 25,000 clients across the US, Canada and the UK in more than 240 languages with a sophisticated growing network of approximately 8,000 interpreters. This acquisition will reinforce and boost Teleperformance's global leadership as a provider of high end value-added services, and will positively impact Teleperformance's profitability profile."
The emphasis on "profitability profile" was critical. Traditional call center operations faced persistent margin pressure as clients demanded cost reductions and labor costs in key markets increased. LanguageLine operated in a different competitive environment. Over-the-phone and video interpretation services required specialized training, certification, and technology infrastructure that created meaningful barriers to entry. The business model—providing rapid access to interpreters in 240+ languages for healthcare, legal, and emergency services—commanded premium pricing.
The Group therefore decided to disclose a new organization of its operations, with the "Core Services" now covering customer care, technical support and customer acquisition, and "Specialized Services" bringing together the recently acquired interpreting services provided by LanguageLine Solutions, the visa application management services for governments provided by TLScontact, analytics solutions, and debt collection programs. Specialized services delivered an EBITA margin of approximately 30% in 2016 and have the potential to generate revenue growth of at least + 6% per year over the next three years.
A 30% EBITA margin compared to approximately 10-11% for Core Services represented a fundamental improvement in business quality. The LanguageLine acquisition didn't just add revenue—it transformed Teleperformance's earnings power and strategic positioning.
The acquisition of LanguageLine Solutions in September 2016 reflects the Group's strategic decision to develop, high-value specialized services. Through targeted acquisitions, Teleperformance has gradually transformed the Group into a premium provider of Business Process Outsourcing (BPO) with an international scope.
The market agreed with the strategic logic. "Teleperformance's shares up strongly over past 4-5 years... The markets agree and Teleperformance shares were up 6% at press time despite the deal's rich price tag."
For investors, the LanguageLine acquisition represented a maturation of Teleperformance's strategy. Rather than competing solely on scale and cost efficiency in commoditized call center services, the company was building a portfolio of specialized, high-margin businesses that offered structural competitive advantages. This strategic pivot would prove prescient as AI disruption later threatened the more commoditized portions of the business.
VII. The COVID Era: Crisis and Opportunity (2020–2021)
When COVID-19 swept across the globe in early 2020, Teleperformance faced an unprecedented operational challenge. Call centers are, by design, densely packed environments where workers sit shoulder-to-shoulder, sharing headsets and keyboards while handling thousands of customer interactions daily. The virus threatened to shut down the entire industry.
What happened next demonstrated Teleperformance's operational capabilities at their finest—and also exposed tensions that would generate significant controversy.
Teleperformance secured multiple United Kingdom government and NHS contracts to operate support services for the public during the COVID-19 pandemic. In 2020, Teleperformance launched Teleperformance Cloud Campus in Portugal, with mobile cloud-enabled workstations for virtual onboarding, training, and employee meetings.
The transition from office-based to remote work happened at remarkable speed. The company that had built its competitive advantage on centralized, process-driven operations rapidly deployed work-from-home infrastructure for tens of thousands of employees. Industry observers noted the rapid deployment: from 10,000 work-at-home agents before the pandemic to over 160,000 in less than four months—an operational transformation that few organizations could match.
The pandemic created both operational challenges and business opportunities. As consumers shifted to online channels, demand for customer service surged. E-commerce companies, healthcare providers, and government agencies needed support infrastructure immediately. Teleperformance's global scale and operational flexibility positioned it to capture this demand.
The financial results reflected this dynamic. The pandemic initially created uncertainty, but the rapid operational adaptation and surge in demand drove exceptional performance. All companies that enabled remote activities benefited, and Teleperformance's valuation reflected this enthusiasm—the P/E ratio reached approximately 50x in 2020, a level that suggested investors were pricing in sustained acceleration of digital transformation trends.
The CAC 40 inclusion on June 22, 2020 marked a symbolic milestone. Daniel Julien, le fondateur de Teleperformance, avait réalisé son rêve... Teleperformance est entrée au CAC 40, le 20 juin 2020. Since the 22nd of June, the CAC 40 welcomes a new member: Teleperformance, the world's number one in "customer relations," otherwise known as call centers.
However, the pandemic period also exposed significant controversies regarding working conditions. In a complaint filed with the French government today, a coalition of labour unions is calling for immediate intervention to stop violations of workers' right to a safe workplace at Teleperformance, the Paris-based outsourcing giant for clients like Apple, Facebook, Amazon, and Google. The complaint, delivered to the French OECD National Contact Point in Paris, is the first-ever filed under the OECD Guidelines for Multinational Enterprises alleging workers' rights violations during the Covid-19 crisis. It documents shocking, unsanitary conditions such as hundreds of workers having to sleep on crowded call centre floors and multiple employees sharing equipment such as headsets during the coronavirus crisis.
Due to COVID-19 restrictions, workers in the Philippines, including those supporting Amazon's Ring camera contract, had to sleep at their work spaces and were unable to meet social distancing requirements. The Financial Times was able to verify this, including in a Cebu City office.
These allegations, verified by major international publications, created reputational damage that would linger. The French OECD National Contact Point eventually issued recommendations calling on Teleperformance to strengthen due diligence processes and ensure workers' rights were respected throughout global operations.
For investors, the COVID period illustrated both Teleperformance's operational strengths and ESG vulnerabilities. The rapid work-from-home transition demonstrated institutional capabilities. The labor controversies revealed the tensions inherent in managing a global workforce of hundreds of thousands across jurisdictions with varying labor standards.
VIII. Key Inflection Point #3: The AI Reckoning & Stock Collapse (2022–2024)
The record P/E multiples of 2020 contained within them the seeds of their own destruction. Investors had bid Teleperformance shares to stratospheric valuations on expectations that pandemic-accelerated digital transformation would continue indefinitely. When those expectations collided with a revolutionary new technology, the results were catastrophic.
OpenAI launched its revolutionary conversational app ChatGPT on 30 November 2022.
Within weeks, the implications for Teleperformance became painfully apparent. ChatGPT could handle many of the customer service interactions that formed Teleperformance's core business: answering product questions, processing routine inquiries, providing technical support guidance. While the technology couldn't yet replace all human interactions, it raised existential questions about the industry's future economics.
Teleperformance started 2023 with a strong push towards generative artificial intelligence (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.
This admission—that a significant portion of activities could be automated—confirmed investors' worst fears even as management attempted to present it as an opportunity. The company's own acknowledgment of automation potential became ammunition for short-sellers.
Then came Klarna.
Teleperformance SE shares plummeted by 29% after Klarna claimed its AI assistant replaced 700 full-time agents, causing industry-wide concern. The call-center sector faces potential upheaval from AI advancements, with analysts warning of pricing
The AI tool resolved errands much faster and matched human levels on customer satisfaction, Klarna said. Teleperformance shares fell as much as 29% in Paris trading, the steepest drop since November 2022, amid regular halts for volatility.
The Klarna announcement in February 2024 was perfectly calibrated to inflict maximum damage. Here was a major technology company—one that had been a Teleperformance client—publicly declaring that AI had already replaced the work of 700 human agents while matching customer satisfaction levels. In a statement dated on Tuesday, Klarna said the numbers were equivalent to the work of 700 full-time agents and "on par" with human workers with regards to consumer satisfaction scores. The AI technology, Klarna added, is projected to drive a $40 million profit improvement in 2024.
Analyst reactions amplified the panic. Morgan Stanley analyst Annelies Vermeulen highlighted the ongoing AI debate's impact on Teleperformance, pointing out that the stock may continue to face challenges until there's clarity on issues such as pricing deflation and the future shape of earnings. Similarly, Deutsche Bank AG analysts have previously warned that AI could lead to significantly slower revenue growth and weaker profitability for Teleperformance, compared to its performance over the last decade.
The cumulative impact was staggering. Today, the share price is showing it: -36% over one year, -73% over three years, -75% over five years. Result: Teleperformance ended up being kicked out of the CAC 40 last September.
Euronext announced on Thursday that it will be joining the CAC 40, the flagship index of the Paris Stock Exchange, while Teleperformance will be removed... According to Euronext's press release, these changes will take effect from September 22.
The CAC 40 removal represented symbolic humiliation—less than five years after achieving Julien's dream of CAC 40 inclusion, Teleperformance was ejected. But more consequentially, the removal triggered mechanical selling by index funds, further pressuring the share price.
For investors, the AI reckoning raises profound questions about Teleperformance's future. The company's response—investing in AI partnerships, launching its own AI platforms, emphasizing the continued importance of human judgment—may prove prescient or may represent the classic innovator's dilemma response of incumbents facing disruption. The market's verdict has been harsh, but markets have been wrong before.
IX. Key Inflection Point #4: The Majorel Mega-Merger (2024)
In the midst of AI-driven turmoil, Teleperformance executed its largest acquisition ever—a €3 billion deal that demonstrated the company's continued strategic ambition even as its share price collapsed.
On November 8, 2023, the transaction is completed after all regulatory approvals have been received. Majorel becomes part of Teleperformance.
French BPO giant Teleperformance has fully acquired Majorel after two key shareholders, Bertelsmann and Saham, divested their holdings in the call center firm. German media conglomerate Bertelsmann confirmed that they, alongside Saham, exchanged their combined 40% stake in Majorel for a 4% shareholding in Teleperformance. Reports suggest that Teleperformance now owns 99% of the shares in Majorel.
The acquisition of Majorel for 3 billion euros enabled Teleperformance to broaden its presence in Europe, particularly in France and Germany, in several high-growth potential verticals, and in areas of high-value expertise.
Majorel's backstory added intrigue to the transaction. Strong growth story: Majorel's revenue nearly doubled to €2.1 billion in 2022 since its founding in 2019. The company had been created through a merger of Bertelsmann's Arvato CRM business with a BPO provider owned by Moroccan real estate company Saham. Its rapid growth and strong market position in content moderation and digital services made it an attractive target.
Before this, he was the CEO of Majorel Group, where he led the company from its inception until its IPO on the Euronext Amsterdam in 2021 and its acquisition by TP at the end of 2023. Prior to Majorel, Thomas spent over 12 years at Bertelsmann, a global leader in media and services, where he held various senior leadership roles. He began his career at McKinsey & Company in 2000, with a focus on servicing clients in the telecom and high-tech sectors.
The acquisition brought Thomas Mackenbrock—Majorel's former CEO—into Teleperformance's senior leadership as Deputy CEO. This represented a meaningful management evolution, with Mackenbrock's McKinsey pedigree and digital expertise complementing Julien's operational experience.
The strategic logic was compelling: industry consolidation in the face of AI disruption. A new, expanded Group with the acquisition of Majorel: €5 billion in first-half revenue, up a reported +28.2%
Integration progress has been reported as on track. The integration of Majorel is progressing as planned. Cost synergies amounted to €94 million in 2024, generated primarily in the second half of the year as expected. Integration-related synergy costs totaled €58 million.
For investors, the Majorel acquisition represents a double-edged sword. On one hand, industry consolidation makes strategic sense when facing technological disruption—larger scale provides more resources for AI investment and more bargaining power with clients. On the other hand, integrating a €3 billion acquisition while simultaneously managing AI transition creates significant execution risk.
X. 2024–2025: The AI Pivot & Current State
Teleperformance's 2024 financial results painted a picture of a company maintaining operational discipline even as strategic uncertainty clouds its future.
In Q4 2024, TP delivered €2,684 million in revenue, an increase of +12.0% on a reported basis and +4.0% on a pro forma basis, reflecting a growth acceleration compared to the first nine months. For the full-year revenue reached €10,280 million, with growth of +23.2% on a reported basis and +2.6% on a pro forma basis. The Group maintained strong momentum across its two business segments: Core Services experienced accelerating growth throughout the year, while Specialized Services maintained robust organic growth and high profitability over the year. TP's operational profitability improved, with recurring EBITA reaching €1,537 million, representing a margin of 15.0% of revenue versus 14.9% in 2023, in line with the Group's annual targets. Net income amounted to €523 million.
The company achieved a record level of available net cash flow: Record level of available net cash flow: €1,084 million and increased dividends to €4.20 per share while completing a €500 million share buyback program.
Most significantly, Teleperformance is making substantial AI investments. Through our comprehensive strategic plan, we will increase investments in advanced technologies and new strategic partnerships in AI up to €100 million in 2025. We will also expedite the development of cutting-edge solutions, harnessing the combined strengths of artificial intelligence and our employees' emotional intelligence.
The AI partnership strategy has accelerated in 2025:
TP announced a partnership with Sanas, a provider of software that uses AI to adjust a speaker's accent in real-time, in February 2025. TP also made an equity investment of approximately $13 million in Sanas.
"The partnership supports TP's strategy to further invest in and expand its advanced artificial intelligence (AI) capabilities by integrating proprietary technologies and strategic collaborations to strengthen its position as a leader in delivering innovative, AI-driven solutions that transform customer experiences."
TP and Carnegie Mellon University announced a partnership in March 2025 to accelerate AI applied research. In June 2025, TP purchased Vancouver-based AI crowdsourcing platform Agents Only. The company also launched TP.ai FAB, an AI orchestration platform.
The ZP acquisition expanded the high-value Specialized Services segment: TP expanded its high-value Specialized Services segment with the acquisition of ZP, a fast-growing leader in language solutions and technology platforms for the deaf and hard-of-hearing community in the United States. The acquisition, announced on November 26, 2024, was finalized on February 5, 2025.
For 2025, guidance reflects cautious optimism: The company is aiming for like-for-like growth of 2-4% in 2025.
Management has articulated a "High Tech, High Touch" positioning that attempts to reframe AI as complementary rather than competitive: "Although artificial intelligence has sometimes been portrayed as a threat to human-led services, Teleperformance views it as an essential enabler for delivering more flexible, efficient, and high-touch interactions... 'AI isn't about displacing our workforce. Instead, it's about amplifying the value our people bring by allowing them to focus on the complex, relationship-driven aspects of customer interactions.'"
For investors, the question remains whether these investments and repositioning efforts will prove sufficient to offset the structural headwinds from AI disruption.
XI. Controversies & ESG Challenges
Teleperformance's growth has generated significant controversy regarding labor practices and content moderation activities. These issues create both reputational risk and potential legal exposure.
Labor Violations: In 2008 a class action lawsuit was filed against Salt Lake City-based Teleperformance USA seeking unpaid wages for employees, alleging a violation of the Fair Labor Standards Act. On 19 May 2010, a settlement was reached for approximately $2 million to be paid to 15,862 workers in 10 US states.
COVID-Era Controversies: The complaint, delivered to the French OECD National Contact Point in Paris, is the first-ever filed under the OECD Guidelines for Multinational Enterprises alleging workers' rights violations during the Covid-19 crisis. It documents shocking, unsanitary conditions such as hundreds of workers having to sleep on crowded call centre floors and multiple employees sharing equipment such as headsets during the coronavirus crisis. The complaint also alleges retaliation against workers who organized for basic personal protections and dismissals of trade union leaders.
"These widespread problems show a disregard for workers' fundamental rights, including their health and safety, throughout the company's global management. That is why we are asking the French government to step in and help secure urgent remedies under the OECD Guidelines."
Content Moderation Challenges: The company's Trust and Safety business has generated particular controversy. The Paris-based contractor said in November it would exit the "highly egregious part of the trust and safety business," after a report that employees were subject to occupational trauma from monitoring disturbing images of violence, suicide and animal cruelty.
Forbes reported that "hundreds" of TikTok and Teleperformance employees had "free access" to the document. The required reading, along with other content moderation training materials, were stored in the internal workplace software, Lark, developed by TikTok's parent company, Chinese Communist Party (CCP)-tied ByteDance.
These allegations drew bipartisan Congressional scrutiny and generated significant negative press coverage.
It made the decision to maintain the practice after conducting internal audits and third-party reviews, "with a special focus on its people management and workplace practices," Teleperformance said in a statement.
The reversal of the decision to exit egregious content moderation "sends a confusing message overall" that "could be taken negatively by some investors."
Despite these controversies, Teleperformance has maintained positions in key ESG indices. The company's shares are included in the CAC 40 ESG since September 2022, the Euronext Vigeo Euro 120 index since 2015, the MSCI Europe ESG Leaders index since 2019, and the FTSE4Good index since 2018.
For investors, these ESG issues represent material risks. Labor disputes create legal exposure and operational disruption. Content moderation controversies could lead to contract losses with major technology clients. More broadly, the tensions inherent in managing 490,000 employees across 100 countries—many in jurisdictions with limited labor protections—will persist regardless of specific controversies.
XII. Playbook: Business & Investing Lessons
Teleperformance's nearly five-decade journey offers essential lessons for investors and business strategists.
Founder-Led Longevity: Daniel Julien founded Teleperformance at 25 and continues to serve as CEO at 72. This extraordinary tenure demonstrates both the benefits and risks of founder leadership. The benefits include strategic consistency, institutional knowledge, and willingness to make long-term investments. The risks include succession uncertainty, potential blindness to disruptive threats, and the challenge of adapting to radically changed competitive environments.
The 50/50 Growth Model: "We always have managed our growth with 50 percent organic growth and 50 percent acquisition. Our organic growth has consistently been greater than the growth of the market." This balanced approach provided discipline during expansion phases—acquisitions had to complement organic growth rather than substitute for it.
Geographic Arbitrage: Teleperformance's global footprint enables labor cost arbitrage across markets. Customer service for American clients can be delivered from the Philippines, Colombia, or India at significantly lower cost than domestic delivery. This geographic arbitrage created competitive advantage for decades but also created vulnerability—the same cost arbitrage logic suggests AI could provide even greater savings.
Service Diversification: The evolution from commodity call centers to specialized high-margin services (LanguageLine, TLS Contact, ZP) demonstrates strategic adaptation. Specialized services delivered an EBITA margin of approximately 30% in 2016—nearly three times Core Services margins. This diversification into harder-to-replicate services provides some insulation from AI disruption.
Crisis Response: The rapid deployment of work-from-home infrastructure during COVID demonstrated operational capabilities that few competitors could match. This agility suggests Teleperformance possesses institutional capabilities that may prove valuable in navigating AI transition.
XIII. Porter's 5 Forces & Hamilton's 7 Powers Analysis
Porter's 5 Forces
1. Threat of New Entrants: MODERATE It operates in 91 countries and serves 170 markets. Today it is the largest company in this specific sector in the world. Scale creates barriers through client relationships, global delivery capabilities, and operational expertise. However, AI-native startups could potentially enter with fundamentally different cost structures.
2. Bargaining Power of Suppliers: LOW Labor represents the primary input, and Teleperformance accesses labor across 100 countries—an extremely fragmented supply base. Technology vendors are generally interchangeable.
3. Bargaining Power of Buyers: MODERATE-HIGH Large enterprise clients possess significant negotiating power. Contract renewals involve competitive bidding, and clients can credibly threaten to bring services in-house or shift to alternative providers. AI capabilities may shift this balance further toward buyers.
4. Threat of Substitutes: HIGH (and rising) This is the critical force. AI chatbots, voice assistants, and automated service systems represent direct substitutes for many services Teleperformance provides. The Klarna episode demonstrated that major clients view AI as viable substitute for at least some human-delivered services.
5. Industry Rivalry: HIGH Teleperformance's top 13 competitors are Concentrix, Genpact, Webhelp, Bertelsmann, Transcom, SYKES, Sutherland, TTEC, Alorica, Sopra Steria, Atento, Grupo Contax and Americollect. Together they have raised over 5.2B between their estimated 1.1M employees. Teleperformance has 490,000 employees and is ranked 1st among its top 10 competitors.
Hamilton's 7 Powers
1. Scale Economies: Present but eroding. Teleperformance's global scale creates cost advantages, but AI potentially enables smaller competitors to achieve similar or superior economics.
2. Network Effects: Limited. Customer service is not inherently network-effect-driven.
3. Counter-Positioning: Potentially emerging. If Teleperformance can successfully position as "AI-augmented human services"—combining automation with human judgment—it may create counter-positioning against pure-AI alternatives.
4. Switching Costs: Moderate. Enterprise contracts, knowledge of client systems, and regulatory requirements create switching costs, but they're not insurmountable.
5. Branding: Limited relevance. B2B services don't command consumer brand premium.
6. Cornered Resource: Limited. Labor is not proprietary. However, LanguageLine's interpreter network and TLS Contact's government relationships represent cornered resources in specialized segments.
7. Process Power: Potentially significant. "The major strength of our company is also the process... At Teleperformance, everything that makes the machine work smoothly is recorded and written down, and I'm convinced that it's one of our greatest strengths." Decades of operational refinement create process advantages that are difficult to replicate—but these processes were optimized for human-delivered services.
Competitive Positioning
Concentrix Corp has 450,000 employees and $9.6B in revenue. Tech Mahindra has 148,731 employees and $6.3B in revenue. TELUS International has 78,879 employees and $2.7B in revenue. TTEC Holdings has 50,000 employees and $2.2B in revenue.
Teleperformance maintains the #1 position globally by both revenue and employee count, but the industry is consolidating in response to AI pressure. The Majorel acquisition demonstrates this consolidation dynamic.
XIV. Bull & Bear Case Analysis
Bull Case
AI as Opportunity, Not Threat: The optimistic view holds that AI will augment rather than replace human customer service agents. Complex interactions requiring empathy, judgment, and relationship management will remain human domains while AI handles routine queries. Teleperformance's scale and client relationships position it to be the preferred partner for AI-augmented service delivery.
Specialized Services Resilience: LanguageLine's interpretation services, TLS Contact's visa processing, and ZP's deaf/hard-of-hearing solutions face limited AI disruption. These businesses provide structural growth and margin support while Core Services transitions.
Valuation Disconnect: The stock trades at an average of 26x earnings over 10 years, which is a tad more than Apple over the same period. However, Teleperformance went from a ridiculously high level in 2020 (50x) to an extremely low one in 2024 (9.5x). At current valuations, the market may be over-discounting AI risks while ignoring substantial cash flow generation and specialized services value.
Management Execution: Daniel Julien has navigated five decades of technological change. The company's track record of acquisition integration and operational adaptation suggests institutional capabilities for managing transition.
Bear Case
Structural Disruption: AI capabilities are improving rapidly. The Klarna demonstration was early-stage; as large language models improve, they will handle increasingly complex interactions. The 20-30% automation estimate management cited may prove conservative.
Client Concentration Risk: Major technology clients like Apple, Amazon, and Google are themselves AI leaders. They may prefer building internal AI-powered customer service rather than outsourcing to third parties.
Labor Model Vulnerabilities: Teleperformance's competitive advantage derived partly from accessing low-cost labor globally. AI eliminates this arbitrage opportunity—chatbots cost the same everywhere.
ESG Overhang: Content moderation controversies and labor practice allegations create reputational and legal risks that could affect client relationships and employee recruitment.
XV. Key Performance Indicators to Monitor
For investors tracking Teleperformance's evolution, three KPIs deserve particular attention:
1. Pro Forma Like-for-Like Revenue Growth This metric strips out acquisition effects and currency movements to reveal organic business trajectory. Current guidance suggests 2-4% growth for 2025. Sustained deceleration below market growth rates would signal competitive position erosion. Acceleration would suggest the AI-augmentation thesis is gaining traction with clients.
2. Specialized Services Revenue Mix & Growth Net sales by customer sector break down into... specialized services (14.5%): online interpreting, visa application management and debt collection. Growing this mix toward 20%+ would demonstrate successful pivot toward AI-resilient revenue streams. The segment's approximately 30% EBITA margins provide earnings leverage as mix shifts.
3. Net Free Cash Flow / EBITDA Conversion Record level of available net cash flow: €1,084 million against approximately €2.1 billion in EBITDA suggests strong cash conversion. Maintaining this conversion ratio while investing €100 million annually in AI partnerships would demonstrate the company can fund its transformation while returning capital to shareholders.
XVI. Conclusion: The Merchant of Venice's Challenge
Daniel Julien built Teleperformance in the image of his childhood hero Marco Polo—a merchant who bridged worlds, who saw opportunity where others saw only distance and difference. For nearly five decades, that vision proved prescient. The telephone-as-commerce-tool concept that seemed quaint in 1978 Paris became a global industry employing millions.
But even Marco Polo eventually returned home to Venice. And the world he had documented—the trade routes he had mapped, the customs he had catalogued—eventually changed beyond recognition. The Silk Road gave way to ocean shipping; the Mongol Empire crumbled; Venice itself declined from commercial powerhouse to tourist attraction.
Teleperformance now faces its own moment of reckoning. The company that mastered the art of human connection at industrial scale confronts a technology that simulates human connection at near-zero marginal cost. The 490,000 employees who form Teleperformance's competitive moat may become its greatest liability if AI can deliver comparable service quality without salaries, benefits, or physical infrastructure.
The company's response—€100 million in AI investments, strategic partnerships with technology providers, emphasis on "High Tech, High Touch" positioning—represents a bet that human judgment and empathy will remain valuable even as AI handles routine interactions. This may prove correct; many customer service interactions involve emotional complexity that current AI cannot navigate. Or it may represent the classic response of incumbents facing disruption: trying to integrate the new technology while defending the old business model.
For investors, Teleperformance offers a fascinating study in technological disruption, founder persistence, and the vagaries of market sentiment. The company generates over €1 billion in annual free cash flow, trades at single-digit earnings multiples, and possesses specialized businesses with meaningful competitive moats. These characteristics suggest value that current prices may not reflect.
But the structural questions remain unresolved. Can the world's largest call center company become a leading AI-augmented services provider? Can Daniel Julien, the entrepreneur who built his career on human-delivered services, lead the transformation to a hybrid model? Can 490,000 employees adapt to a world where their AI co-workers improve exponentially every year?
Marco Polo's travels eventually inspired others to seek new routes to the East—routes that rendered his overland journeys obsolete. The question for Teleperformance is whether it can chart its own new route, or whether it too will become a historical curiosity—a remarkable company that mastered one era but couldn't survive into the next.
The market has rendered its current judgment. History will render the final one.
Key Metrics Summary (2024) | Metric | Value | |--------|-------| | Revenue | €10.28 billion | | Recurring EBITA | €1.54 billion | | EBITA Margin | 15.0% | | Net Free Cash Flow | €1.08 billion | | Employees | ~490,000 | | Countries | ~100 | | Dividend | €4.20/share |
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