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 in regards to the energy of the worldwide economic system.

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

McKinsey is reducing as much as 2,000 jobs in its 45,000 workforce, whereas KPMG is shedding nearly 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 exterior 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 sturdy demand for tech recommendation from massive corporations. In three years its workforce has grown by about 229,000 individuals.

Accenture estimates that the deliberate job reductions will value 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, in the course of the second quarter of fiscal 2023, we initiated actions to streamline our operations and rework 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 workers who depart might 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 night time, 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 put money into our enterprise and our individuals 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 Fifties. At present it has greater than 9,000 shoppers internationally. The group listed in 2001 and has a market worth of $190 billion.

The corporate has decreased 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 steerage.

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

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

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