Key highlights
- Accenture cuts 19,000 jobs worldwide
- The company took this action to streamline its operations and transform non-billable corporate functions to reduce costs.
- Accenture’s competitors in the consulting industry are also attempting to cut costs.
Accenture announced that it has slashed 19,000 jobs worldwide as it tries to reduce costs in the face of a bleak economic outlook.
The Irish-American professional services firm said in a Thursday filing that it would spend $1.2 billion in severance to cut 2.5% of its workforce over the next 18 months, and another $300 million to consolidate its office space.
According to the company, back-office employees would constitute more than half of the laid-off positions.
Streamlining operations
Accenture, which has 738,000 employees worldwide, stated in its most recent quarterly report to the Securities and Exchange Commission that it “initiated actions to streamline its operations and transform our non-billable corporate functions to reduce costs.”
The $167 billion company reduced its revenue growth forecast for the fiscal year 2023 to between 8% and 10%, down from 8% to 11% previously.
Accenture shares rose 3.9% to $263 in early trading following the announcement. Over the last year, the stock has dropped by more than 5% on the New York Stock Exchange.
Other cuts in the industry
Accenture’s competitors are also attempting to cut costs. According to the Financial Times, consulting giant KPMG announced last month in an internal memo that it would cut nearly 2% of its US workforce due to dwindling client demand.
Bloomberg reported last month that McKinsey could lay off up to 2,000 non-consulting employees in one of its largest rounds of layoffs ever, citing unnamed sources close to the matter.
Layoffs in other industries
Thousands of workers have been laid off in recent months as higher interest rates, inflation, and recession fears have caused a drop in advertising and consumer spending.
Last week, Facebook-parent Meta announced plans to lay off another 10,000 workers which is the company’s second round of significant job cuts in four months. Taken together, the cuts will result in a 25% reduction in Meta headcount.
The same can be said in Nigeria where many tech workers have been laid off, due to trimming of costs and streamlining operations.
