French IT services company Atos (ATOS.PA) said on Wednesday it expects sales at its loss-making unit Tech Foundations to hit bottom in 2024, as it continues to invest in the business to make it more competitive.
Atos, which is in the midst of a major restructuring, said it expects Tech Foundations to post a loss of between 100 million and 150 million euros ($105 million and $162 million) in 2023, before returning to profitability in 2024.
The company said it is investing in Tech Foundations to make it a more agile and customer-focused business. This includes investing in new technologies, such as cloud computing and artificial intelligence, as well as in training and development for its employees.
Atos said it is also working to reduce costs at Tech Foundations. This includes reducing the number of employees, as well as renegotiating contracts with suppliers.
The company said it is confident that its investments in Tech Foundations will pay off in the long term. It said the business has a strong track record of innovation and customer service, and that it is well-positioned to benefit from the growing demand for IT services in the cloud and AI markets.
Quotes:
- "We are confident that our investments in Tech Foundations will pay off in the long term," said Rodolphe Belmer, CEO of Atos. "The business has a strong track record of innovation and customer service, and it is well-positioned to benefit from the growing demand for IT services in the cloud and AI markets."
- "We are committed to making Tech Foundations a more agile and customer-focused business," said Belmer. "We are investing in new technologies, training and development, and cost reduction to make this happen."
Analysis:
Atos's decision to invest in Tech Foundations is a sign of its commitment to the business. The company is aware that Tech Foundations is a loss-making unit, but it believes that the business has the potential to be profitable in the long term.
Atos's investments in Tech Foundations are focused on three key areas:
- New technologies: Atos is investing in new technologies, such as cloud computing and artificial intelligence, to help Tech Foundations become more competitive.
- Customer service: Atos is investing in customer service to improve the way Tech Foundations interacts with its customers.
- Cost reduction: Atos is investing in cost reduction to improve the profitability of Tech Foundations.
Atos's decision to invest in Tech Foundations is a risky move, but it could pay off handsomely if the company is successful. If Tech Foundations is able to become profitable, it could provide a significant boost to Atos's bottom line.
However, there are also risks associated with Atos's investment in Tech Foundations. The company could fail to make Tech Foundations profitable, or it could spend too much money on the investment. If either of these things happens, it could damage Atos's financial performance.
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