Accenture To Cut 19,000 Jobs, After Lowering Forecasts

Accenture has announced it will cut many thousands of jobs worldwide, despite new bookings for the second quarter increasing 13 percent to $22bn.

The Ireland-based IT services giant also posted a 9 percent rise in Q2 revenues to $15.8bn, but looking ahead, it lowered its annual revenue and profit forecasts.

The firm in a SEC filing confirmed it will cut about 2.5 percent of its workforce, or 19,000 jobs, saying there “continues to be significant economic and geopolitical uncertainty in many markets around the world, which has impacted and may continue to impact our business.”

Job cuts

The firm said more than half of the jobs to be cut will be in its non-billable corporate functions. News of the job cuts pleased investors, sending its shares up 6.4 percent.

“While we continue to hire, especially to support our strategic growth priorities, during the second quarter of fiscal 2023, we initiated actions to streamline our operations and transform our non-billable corporate functions to reduce costs,” the firm said in its filing.

“Over the next 18 months, these actions are expected to result in the departure of approximately 19,000 people (or 2.5 percent of our current workforce), and we expect over half of these departures will consist of people in our non-billable corporate functions.”

Accenture currently has a 738,000 strong workforce, up from 699,000 at the end of February 2022.

“For the second quarter of fiscal 2023, attrition, excluding involuntary terminations, was 12 percent, down from 18 percent in the second quarter of fiscal 2022,” it said. “We evaluate voluntary attrition, adjust levels of new hiring and use involuntary terminations as a means to keep our supply of skills and resources in balance with changes in client demand.”

The company said it now expects annual revenue growth for the fiscal 2023 to be between 8 to 10 percent, down from 8 to 11 percent.

Economic, geopolitical uncertainty

“Our results of operations are affected by economic conditions, including macroeconomic conditions, the overall inflationary environment and levels of business confidence,” said the firm.

“There continues to be significant economic and geopolitical uncertainty in many markets around the world, which has impacted and may continue to impact our business, particularly with regard to wage inflation and volatility in foreign currency exchange rates,” it said. “In some cases, these conditions have slowed the pace and level of client spending.”

The firm said it expects to spend around $1.2bn (£0.97bn) in severance costs, but it hopes to save around $1.5bn (£1.2bn) by closing offices globally.

The Accenture job cuts will take place around the world, including the UK, although there is no confirmation of the number of UK job losses at the time of writing.

Accenture employs 11,000 staff in the UK, and in 2020 it trimmed 700 to 900 UK jobs amid the Covid-19 pandemic.