An Irish-American professional services company based in Dublin, which specializes in information technology services and consulting, Accenture, has revealed plans to trim its workforce by laying off 19,000 workers.
The global IT firm revealed in a filing on Thursday its plans to 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. It also lowered its forecasts with revenue expected to grow between 8% and 10% this fiscal year, down from a previous range of 8% to 11%.
Accenture, which has 738,000 employees globally, disclosed in its latest quarterly report to the Securities and Exchange Commission (SEC) that it continues to hire, but had initiated actions to streamline its operations and transform its non-billable corporate functions to reduce costs.
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The CEO of the IT firm Julie Sweet said in a statement, “We are also taking efforts to cut our expenses in the fiscal year 2024 and beyond while continuing to invest in our business and our people to grasp the enormous growth possibilities ahead”.
Shares in Accenture rose as much as 8.4% in New York following this announcement. The company also said bookings rose to a record $22.1 billion in its second quarter, beating estimates, a 13% increase from the same period last year. Over half of the total new bookings came from managed services with consulting making up the rest. Revenue also rose 5% to $15.8 billion.
Accenture’s proposed layoffs are coming after the firm increased its headcount between Feb. 28, 2022, and Feb. 28, 2023, by about 39,000 to 738,000 employees. The cuts also came after it had gone on a massive acquisition spree. In 2022, the company made 25 acquisitions worldwide which include Barcelona-Based Alfa Consulting, Argentina-based Ergo, Brussels-based Greenfish, and Minnesota-based the stable.
Commenting on the firm’s layoff, a top sales executive for an SP 500 solution provider stated that he was not surprised by Accenture’s proposed plan to layoff some of its workers, given the buying spree by the systems.
He said, “Big companies like Accenture always over-rotate when they are pursuing a growing market like cloud. Their sales go up for several years but they fail to anticipate economic factors that could slow growth down. Three years from now they will be returning people when the economy is good again”.
He further added that he sees the layoff as a sign that Accenture is seeing a slowdown in the rapid lift and shift move to the cloud that came in the wake of the covid-19 pandemic.
Accenture is a $61.6-billion-in-annual-revenue technology and consulting company incorporated in Dublin, Ireland. The IT firm reported revenues of $61.6 billion in 2022. Its current clients include 91 of the Fortune Global 100 and more than three-quarters of the Fortune Global 500.
As of 2022, Accenture was considered the largest consulting firm in the world by the number of employees (738,000) and has a market value of $184, 927 million. The company has a network of nearly 400 innovation centers, studios, and centers of excellence around the world to deliver cutting-edge research, insights, and solutions to clients where they operate and live.