Finance & Economics

Accenture to Cut 19,000 Employees

Accenture announced its intention to lay off 19 thousand of employees.

Accenture to Cut 19,000 Employees

Source: Pixabay.com

The number of employees affected by the announced layoffs is 2.5% of the company’s total workforce. The reduction of the firm’s staff will be phased and will take 18 months. This decision of the company is part of a general trend in the fintech sector and the financial industry against the background of slowing IT spending.

Currently, there is a lack of growth in the field of IT transactions, as well as consulting services from IBM and Tata.

Accenture strives to adapt to new economic realities, which are not favorable, by applying the practice of reducing the workforce. The company’s annual revenue growth forecast has recently been worsened. Earlier it was predicted that this indicator could grow by 8-11%. Now, growth is expected in the range of 8 to 10%. The prognosis has deteriorated insignificantly and continues to be positive, but the very fact of its revision is symptomatic.

In its filing with the Securities and Exchange Commission (SEC), Accenture said that in the second quarter of the fiscal year 2023, measures were taken to optimize operations, transform non-payable corporate functions and consolidate office space to reduce costs. These measures will cost approximately $1.2 billion in employee severance and other staff costs. Accenture expects that the costs associated with the consolidation of office space will amount to $ 300 million.

The company expects total business optimization costs to be approximately $1.5 billion, with approximately $800 million in the fiscal year 2023 and $700 million in the next fiscal year. The amount and timing of cost coverage partly depend on consultation processes and regulations.

The company’s executive director, Julie Sweet, called the announced reduction of the workforce an offensive, not a defensive action. She said that this strategy will allow the firm to maintain long-term profitability targets against the background of high inflation.

Accenture is a consulting company. The firm was founded in 1989. The company specializes in providing consulting services in the areas of strategic planning, optimization and organization of business process outsourcing, customer and personnel relationship management, logistics process management, and information technology implementation. As of January 2023, the firm’s capitalization was $178 billion.

As we have reported earlier, Amazon Plans New Job Cuts.

 

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.