Accenture PLC is cutting about 19,000 jobs, or 2.5% of its workforce, over the next 18 months as the professional services firm looks to cut costs and streamline operations, amid slowing IT spending.
The company said it expects its business improvement plan to cost about $1.5 billion, mostly from employee terminations, for the remainder of the current fiscal year and fiscal 2024.
Accenture employs approximately 738,000 people globally. The company will not comment on the cuts beyond what it shares in the SEC’s 10-Q filing.
On a call with analysts Thursday morning, CEO Julie Sweet said the advisory firm “has identified an opportunity to pursue more structural costs.” Accenture is also addressing the challenge of “compound wage inflation” through pricing, cost-effectiveness, and digitization, it said.
The IT consulting firm’s layoffs are contributing to a wave of job cuts in recent months as companies across technology, manufacturing and other sectors look to cut costs amid uncertainty about rising interest rates, persistent inflation and other economic challenges.
Until recently, roles in IT were mostly sheltered from sweeping layoffs at big tech companies like Amazon.com. a company.
Alphabet Inc and Meta Platforms a company.
The job market for IT professionals shrank in January for the first time in more than two years, a sign that IT staff faces the same scrutiny as workers in other positions and sectors as companies slow to spend.
Realized technical solutions corp.
Inc., also an IT consulting firm and outsourcing provider, reported a slowdown in its quarterly earnings growth in February. While revenue in its communications, media and technology group grew 9%, Cognizant CFO Jan Siegmund said on an earnings call that growth among its largest customers has slowed, and that it is monitoring changes in the technology sector.
McKinsey & Co said last month that it could cut up to 2,000 jobs from its 45,000-strong employee.
Accenture’s layoffs come as total IT spending worldwide is expected to reach $4.5 trillion in 2023, up 2.4% from a year ago, but less than half the rate previously estimated by research and advisory firm Gartner in 2003. field of information technology a company.
Faced with ongoing economic uncertainty, companies’ technology leaders have sought innovative ways to operate with smaller budgets than in previous years.
Capital One Financial Corp. In January it laid off about 1,100 employees in the group’s “Agile” technology division, which focused on a software development methodology that used faster and more flexible processes.
CFO KC McClure said Thursday on an analyst call that Accenture is also working to consolidate some of its office space.
The news from Accenture came after the company earlier Thursday reported a 5% increase in quarterly revenue and better-than-expected earnings.
Write to Belle Lin at [email protected] and Will Feuer at [email protected]
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