Professional services giant Accenture has signalled it is to cut 19,000 jobs, about 2.5% of its workforce, despite plans to expand employee numbers in the UK.
The move is part of a wider trend in the consultancy sector for layoffs as corporate clients rein in projects in response to growing cautiousness over the global economic situation. Accenture has accordingly lowered its annual forecast of sales and profits.
Other firms to have cut posts include McKinsey, which is axing up to 2,000 jobs in its 45,000 workforce, and KPMG, which is shedding almost 700 posts in its US advisory business and about 200 in Australia.
Dublin-based Accenture has about 738,000 employees worldwide and in the past three years launched a recruitment spree to meet the demand for tech advice from large companies. As a result, its workforce has grown by 229,000 people over that period.
Tech job losses
In late 2021 it announced plans to create 3,000 tech jobs distributed across the UK. It is understood that this commitment remains unchanged.
Accenture said the planned job losses would cost $1.5bn this year and next. It is braced to spend $1.2bn on severance payouts and $300m on the consolidation of office space.
A spokesperson said: “While we continue to hire, especially to support our strategic growth priorities, during the second quarter of fiscal 2023, we initiated actions to streamline our operations and transform our non-billable corporate functions to reduce costs.”
The Accenture job losses will take place over the next 18 months, it said, emphasising that more than half of the employees who will leave are working in non-billable corporate roles.
Julie Sweet, Accenture’s chief executive, said: “We are also taking steps to lower our costs in fiscal year 2024 and beyond, while continuing to invest in our business and our people to capture the significant growth opportunities ahead.”
The company has reduced its projected annual revenue growth to between 8 and 10%, down from a previous forecast of up to 11%. It has also downgraded its profit guidance as net income fell 7% to $1.5bn in its second quarter, ending 28 February.
Ignacio Rasero, vice president-senior credit officer for Moody’s Investors Service, said that Accenture’s job cuts were a result of demand levelling out after the Covid period.
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He said: “Accenture’s credit profile remains very strong following its fiscal 2Q23 results and $1.5 billion cost optimization announcement, including plans to lay off 2.5% of the workforce. The job cuts reflect stabilizing demand, following explosive post-pandemic growth, and prudent cost management. Accenture’s diversified business and industry mix helps offset weakness in specific sectors, such as technology, and provides stability. Long-term demand prospects for Accenture’s services remain high as the company continues to benefit from digital transformation trends.”
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