Adecco says joint venture with Salesforce can help reduce AI bubble risks

By Bernadette Hogg and Marleen Kaesebier

(Reuters) -The chief executive of Adecco said on Wednesday that its joint venture with Salesforce, named r.Potential, could help reduce the risk of an AI bubble by pushing companies into more concrete uses of the technology.

The Swiss staffing group has already talked to 300 large clients who have expressed an interest in the platform, which is designed to guide business leaders in integrating artificial intelligence into the workplace, CEO Denis Machuel said, talking to reporters ahead of Adecco's investor day in London.

"There's really at the moment a disconnect between this enormous supply of AI and the way enterprises are really embedding AI in their core processes," Machuel said.

He added that companies struggle to navigate the supply of agents and AI, in a space where some valuations are "quite high".

"AI, at some point, will need to deliver concrete outcomes," Machuel said, highlighting the r.Potential platform as a tool that could help do that, reducing bubble risks.

While he acknowledged the risks of AI "hallucinations", in which a program provides made-up information, Machuel said further training of these models could reduce the likelihood of them.

In a statement published ahead of the capital markets event, Adecco said its strategy for the coming years would focus on AI and its digital platform.

Earlier this month, Machuel said Adecco had so far only seen a limited impact from AI on the jobs market.

Shares of the company fell more than 7% on Wednesday, with analysts from Zürcher Kantonalbank saying investors might be realizing the risk AI and automation pose to Adecco's business, along with a risk of a dividend cut to reach its target debt ratio.

Adecco targets a net debt equal to or below 1.5 times its core earnings (EBITDA) by the end of 2027.

The recruiter restated its longer-term guidance, including an earnings before interest, taxes and amortization (EBITA) margin of 3% to 6% through the business cycle for the whole group.

On a divisional level, it raised the margin goal for its career development segment LHH to 8-11% from 7-10%, and confirmed previous ranges of 3-6% for the core Adecco business and 7-10% for digital engineering unit Akkodis.

(Reporting by Bernadette Hogg and Marleen Käsebier, editing by Milla Nissi-Prussak)