Global tech consulting giant Accenture has announced its plans to cut 19,000 jobs or around 2.5% of its total workforce, as reported first by TechCrunch on Thursday, March 23.
The company has also revised its annual revenue and profit forecasts downwards in response to the current economic downturn that has affected companies worldwide.
This move comes after the company increased its workforce by 38,000 in the year that ended in February 2023 to serve the increased demand for its services and solutions.
The Accenture logo is displayed at the Mobile World Congress (MWC) in Barcelona on February 26, 2019. - Phone makers will focus on foldable screens and the introduction of blazing fast 5G wireless networks at the world's biggest mobile fair as they try to reverse a decline in sales of smartphones.
Employment Cuts For the Following 18 Months
According to a document the company made on Thursday with the Securities and Exchange Commission (SEC), the employment cuts will be implemented over the course of the following 18 months.
Accenture has stated that the need to balance its supply of talents and resources with shifts in client demand is the driving force behind the job losses, which will affect more than half of the employees in non-billable corporate services.
The company's attrition rate for the second quarter of fiscal 2023 was 12%, which is lower than the rate of 18% for the same period in 2022, according to the filing.
Accenture also revealed that it has lowered its annual revenue growth forecast for the fiscal year 2023 to be between 8% to 10%, down from the previous range of 8% to 11%.
Inflationary Environment
The company attributes this to various economic and geopolitical factors that have impacted its business, including wage inflation, volatility in foreign currency exchange rates, and the overall inflationary environment. It also noted that in some cases, these conditions have led to a slowdown in client spending.
In its financial results for the second quarter of fiscal 2023, which ended on February 28, Accenture reported revenues of $15.8 billion, a 5% increase in US dollars, and a 9% increase in local currency over the same period last year.
The firm has assured that it remains committed to investing in its capabilities, including its digital, cloud, and security offerings, to meet evolving client demands.
Accenture is not the only company feeling the impact of the current economic conditions, many other businesses worldwide are also trimming their expenses to remain competitive.
However, the company's decision to cut jobs could have a significant impact on the affected employees and their families. The company has not revealed which specific regions or departments would be affected by the job cuts.
On Tuesday, Amazon also announced that it will cut off 9,000 more employees. This comes after it just declared a layoff in the previous months, and the figures are still large, with thousands of jobs lost.
The company's chief executive, Andy Jassy, confirmed the news, saying that the layoff is scheduled to occur in the coming weeks and is a part of the company's "operating plan."
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