Accenture announces 19,000 layoffs and forecast cuts
- ByStartupStory | March 23, 2023
Accenture has announced that it will cut approximately 2.5% of its total workforce, which amounts to 19,000 employees.
The company has also revised its annual revenue and profit projections. Over 50% of the job cuts will impact non-billable corporate functions.
In the second quarter, Accenture began implementing measures to simplify operations, restructure non-billable corporate functions, and consolidate office spaces to lower expenses.
During an earnings call, KC McClure, the Chief Financial Officer of Accenture, revealed that the company’s recent actions to streamline operations and transform non-billable corporate functions are expected to result in around 19,000 job cuts, which is equivalent to approximately 2.5% of the current workforce. Of the affected employees, over 50% are associated with non-billable corporate functions, and over 800 of the leaders in various markets and services will be impacted.
The company incurred business optimization costs of $244 million during the second quarter and anticipates total costs of around $1.5 billion by fiscal 2024, which includes $1.2 billion for severance and $300 million for office space consolidation.
Accenture expects to incur around $800 million of these costs in fiscal 2023 and $700 million in fiscal 2024.
According to reports, Accenture has lowered its annual revenue growth projections from an earlier estimate of an 8% to 11% increase to a range of 8% to 10%.
The company has also forecasted third-quarter revenue below the expectations of Wall Street due to concerns that cost-cutting measures by recession-hit enterprises could negatively impact its business. The projected current-quarter revenue is expected to be between $16.1 billion and $16.7 billion, while the average revenue expectation of analysts, as per Refinitiv data, was $16.64 billion.
Cognizant Technology Solutions, a competitor of Accenture, recently reported slow growth in its bookings for 2022, which led to its first-quarter revenue forecast falling below market expectations.
Meanwhile, on Wednesday, Indeed, a job search company, disclosed that it would reduce its workforce by roughly 15%, which amounts to around 2,200 jobs across teams, functions, levels, and regions at Indeed and Indeed Flex.
Disney, a prominent entertainment company, has reportedly instructed its managers to provide a list of employees to be laid off in the upcoming weeks as part of its cost-cutting efforts. According to reports, Disney is likely to terminate the contracts of at least 4,000 of its current employees in April.
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