Accenture cuts 19,000 jobs on slowdown fears

Accenture has introduced plans to chop 19,000 jobs, about 2.5 per cent of its workforce, as company shoppers develop more and more cautious concerning the power of the worldwide financial system.

The enterprise, one of many world’s largest consultancy teams, follows others within the sector in implementing sweeping layoffs after decreasing its annual forecast of gross sales and earnings.

McKinsey is slicing as much as 2,000 jobs in its 45,000 workforce, whereas KPMG is shedding virtually 700 posts in its US advisory enterprise and about 200 in Australia — about 2 per cent of its whole in every nation.

Solely 16 months in the past Accenture pledged to create 3,000 tech jobs within the UK, half of them outdoors of London, over three years. A spokesman for Accenture mentioned this dedication nonetheless stood.

The agency, which has 738,000 workers, launched into a recruitment spree because it loved strong demand for tech recommendation from giant firms. In three years its workforce has grown by about 229,000 folks.

Accenture estimates that the deliberate job reductions will price a complete of $1.5 billion this 12 months and subsequent. It’s braced to spend $1.2 billion on severance payouts and $300 million on the “consolidation of workplace area”.

Accenture mentioned: “Whereas we proceed to rent, particularly to help our strategic progress priorities, through the second quarter of fiscal 2023, we initiated actions to streamline our operations and remodel our non-billable company features to scale back prices.”

The job cuts will happen over the subsequent 18 months, it mentioned, stressing that greater than half of the staff who depart shall be working in non-billable company roles.

Shares in Accenture rose strongly after the announcement and closed up 7.3 per cent, or $18.39, at $271.66 in New York final evening, valuing the agency at $171.2 billion.

Julie Candy, Accenture’s chief govt, mentioned: “We’re additionally taking steps to decrease our prices in fiscal 12 months 2024 and past, whereas persevering with to spend money on our enterprise and our folks to seize the numerous progress alternatives forward.”

Accenture, based mostly in Dublin, began because the know-how consulting arm of the accountancy agency Arthur Andersen within the Nineteen Fifties. In the present day it has greater than 9,000 shoppers the world over. The group listed in 2001 and has a market worth of $190 billion.

The corporate has diminished its projected annual income progress to between 8 and 10 per cent, down from a earlier forecast of as much as 11 per cent. It has additionally downgraded its revenue steering.

It mentioned that whole income rose 5 per cent to $15.8 billion within the three months to February 28, its second quarter. Internet revenue fell 7 per cent to $1.5 billion.

Candy mentioned: “Our sturdy monetary outcomes this quarter once more exhibit that our means to carry collectively trade, useful and know-how experience in addition to managed companies, continues to distinguish us with our shoppers.”

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