Accenture to cut 2.5% of workforce, lay off 19,000 employees

A total of 19,000 jobs, or around 2.5% of its workforce, will be cut at the multinational Technology company Accenture, according to the company’s statement. The move is part of cost-cutting measures, which will also include “streamlining how we operate, consolidating office space, and moving forward with our next compressed transformation – transforming our corporate functions,” according to Julie Sweet, CEO of Accenture, who has explained to the staff that the company aims to be the most tech, data, and AI driven, efficient, and agile enterprise in the world.

The Company has realized that it can “operate with fewer Accenture Leaders (managing directors) in some parts of the company and still drive our growth,” and these departures will take place by the end of 2023, according to Sweet’s mail. Employees in non-billable corporate functions will be most affected by layoffs. For the severance of the impacted employees, the business has set aside $1.2 billion.

The IT major has also lowered its expectations for annual profits and revenue. As opposed to the earlier projection of 8% to 11%, Accenture now anticipates its annual revenue growth to be in the range of 8% to 10% in local currency. Accenture’s projected earnings per share has been reduced from its previous estimate of $11.20 to $11.52 to between $10.84 and $11.06. Yet, the company has declared a $1.12 per share quarterly cash dividend.

Accenture announced new orders of $22.1 billion in the most recent quarter, of which consultancy orders accounted for $10.7 billion and managed services orders for $11.4 billion. According to Sweet, the company will keep making investments in its operations and staff to take advantage of growth prospects while also finding ways to reduce expenses through the fiscal year 2024 and beyond.

Additionally, she reassured that Accenture announced record Q2 sales and anticipates rapid expansion. It is significant to note that Accenture’s third-quarter prediction fell short of what Wall Street had anticipated. The US Federal Reserve decided to raise interest rates by 25 basis points, which was followed by this announcement.

Source: Reuters