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 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 income.

McKinsey is chopping 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 complete 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 stated this dedication nonetheless stood.

The agency, which has 738,000 staff, launched into a recruitment spree because it loved sturdy demand for tech recommendation from massive firms. 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 house”.

Accenture stated: “Whereas we proceed to rent, particularly to assist our strategic progress priorities, through the second quarter of fiscal 2023, we initiated actions to streamline our operations and rework our non-billable company capabilities to cut back prices.”

The job cuts will happen over the subsequent 18 months, it stated, stressing that greater than half of the staff who depart can 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 government, stated: “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, primarily based in Dublin, began because the know-how consulting arm of the accountancy agency Arthur Andersen within the Nineteen Fifties. At this time 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 lowered 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 stated that complete 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 stated: “Our sturdy monetary outcomes this quarter once more exhibit that our skill to carry collectively business, purposeful and know-how experience in addition to managed providers, continues to distinguish us with our shoppers.”

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