Accenture, the IT multinational, has announced that it will be cutting approximately 19,000 jobs, that is, about 2.5 per cent of its workforce.
Julie Sweet, CEO, Accenture, has conveyed to the employees that the move is part of cost-cutting measures, which will also include “streamlining how we operate, consolidating office space, and moving forward with out next compressed transformation – transforming our corporate functions – as we seek to be the most tech, data and AI driven , efficient and agile enterprise in the world”.
According to Sweet’s mail, the Company has realised it can “operate with fewer Accenture Leaders (managing directors) in some parts of the business and still drive our growth” and that these departures will come into effect by the end of 2023.
The majority of the layoffs will impact employees in non-billable corporate functions. The company has set aside $1.2 billion for severance of the affected employees.
Furthermore, the IT major has lowered its annual revenue and profit projections. Accenture now expects its annual revenue growth to be in the range of 8 per cent to 10 per cent in local currency, compared to the previous expectation of 8 per cent to 11 per cent.
Accenture has revised its earnings per share projection to be between $10.84 and $11.06, down from the previous estimate of $11.20 to $11.52. However, the company has announced a quarterly cash dividend of $1.12 per share.
In the latest quarter, Accenture reported new bookings worth $22.1 billion, with consulting bookings accounting for $10.7 billion and managed services bookings at $11.4 billion.
Sweet has stated that the company will continue to invest in its business and workforce to seize growth opportunities, while taking measures to cut costs in fiscal year 2024 and beyond. She has also assured that Accenture reported record Q2 sales and expects strong growth.
It is important to note that Accenture’s third-quarter forecast was below Wall Street’s expectations. This announcement follows the US Federal Reserve’s decision to increase interest rates by 25 basis point.
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