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 purchasers develop more and more cautious in regards to the power 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 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 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 corporations. In three years its workforce has grown by about 229,000 individuals.

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, throughout the second quarter of fiscal 2023, we initiated actions to streamline our operations and remodel our non-billable company features to cut back prices.”

The job cuts will happen over the subsequent 18 months, it mentioned, stressing that greater than half of the staff who depart will probably 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, primarily based in Dublin, began because the expertise consulting arm of the accountancy agency Arthur Andersen within the Nineteen Fifties. As we speak it has greater than 9,000 purchasers 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 steering.

It mentioned that complete 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 reveal that our capability to deliver collectively business, useful and expertise experience in addition to managed providers, continues to distinguish us with our purchasers.”

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