Accenture set to axe 2% of global employees
Global IT consultancy Accenture has lowered its expected annual profit projections, and announced plans to offload more than 2% of its current workforce. The consulting firm’s move to reduce costs will see thousands of people made redundant around the world.
With employees across 120 countries, the company provides specialised skills across more than 40 industries. In particular, the global professional services company provides a range of services in strategy, consulting, digital, technology and operations.
Recent market trends have seen demand for Accenture’s offering boom in recent years. Amid the accelerated digitalisation of the pandemic, Accenture reported revenues of $62 billion for its financial year ending in 2022 – a leap of $11 billion from the previous year. However, economic uncertainty looks to have slowed this.
According to Accenture’s latest forecast, growth in the firm’s revenues is slowing. Previously, the firm anticipated between 8% and 11% expansion, but has issued a correction expecting annual revenue growth to hit 10% in the best-case scenario.
As the firm looks to maximise its profit from those revenues, it has announced a swathe of job cuts across its global operations. Some 19,000 jobs – which the company says will be primarily from employees in non-billable corporate functions – will be terminated, representing 2.5% of Accenture’s total workforce.
Commenting on the news, Julie Sweet, CEO of Accenture, said, “We are also taking steps to lower our costs in fiscal year 2024 and beyond while continuing to invest in our business and our people to capture the significant growth opportunities ahead.”
To that end, Accenture also confirmed it would “continue to hire” to support its growth priorities – with billable consultants joining even as back-office staff make way. With new bookings for the first quarter of 2023 standing at $22.1 billion, consulting bookings at $10.7 billion, and managed services bookings at $11.4 billion, this will help the firm maximise the heightened demand it is experiencing.
In the short-term, however, the strategy will also incur significant costs. Accenture added that the company has set aside $1.2 billion in severance payments for the employees who will be let go.
The news follows similar moves by strategy giant McKinsey and Company and Big Four professional services firm KPMG. Both companies reported large profits for the previous financial year, but still decided the time was right to offload large portions of their workforce – with cuts also targeting back-office functions.
