Accenture cuts 19,000 jobs to reduce IT spending

Accenture, the management, IT and outsourcing consulting firm, will cut 19,000 jobs (2.5% of its workforce). More than half of that cut will be in non-billable business functions, the company said on Thursday (23).

The cut comes after the company lowered its annual revenue and earnings forecast. This is the latest sign that the worsening global economic outlook is undermining corporate spending on information technology (IT) services.

mass layoffs

The technology sector has laid off hundreds of thousands of employees since the end of 2022. The wave of layoffs occurs due to a drop in demand, caused, in turn, by high inflation and rising interest rates.

In February, rival Cognizant Technology Solutions (CTSH.O) “damped” its growth, or ongoing deals with IT services firms, in 2022 and expects lower-than-expected quarterly revenue.

In addition, IBM Corp (IBM.N) and Tata Consultancy Services (TCS.NS), India’s leading IT services firm, showed weakness in Europe. Over there, the war in Ukraine affected customer spending.

Accenture projections

Accenture expects annual revenue growth of between 8% and 10%, compared with its previous forecast of an increase of between 8% and 11%.

Earnings per share are expected to range from US$10.84 (R$57.13, at current prices) to US$11.06 (R$58.29), compared to US$11.20 (R$59.02 ) and US$11.52 (R$60.71) previously. The company expects to incur $1.2 billion (R$6.3 billion) in termination costs through fiscal 2023 and 2024.

In this turbulent economic environment, where companies are looking to get leaner, CEO Julie Sweet said “companies remain focused on executing compact transformations.” The talk came on a post-launch conference call.

More than 1,000 IT decision makers surveyed in an Enterprise Technology Research survey said they plan to reduce budget growth in 2023. Growth expectations are now at 3.4%, down from a 5.6% increase registered in October from 2022.

With information from Reuters

Featured Image: Shutterstock

The post Accenture cuts 19,000 jobs to reduce IT spending first appeared in Olhar Digital.

Source: Olhar Digital