Accenture, one of India’s leading IT services providers, has announced a job cut of 19000 jobs, which is as much as 2.5 percent of the entire workforce.
Accenture is the latest in a series of organizations that have laid off massive numbers of employees.
Accenture To Fire 19000 Employees Working In Non-billable Corporate Functions
Accenture has confirmed that the employees in the company’s non-billable corporate functions would be impacted by more than half of the layoffs.
In an SEC filing, the company stated, “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.”
Accenture also specified that it is anticipated that over the course of the next 18 months, these actions will result in the departure of about 19,000 individuals (or 2.5% of the current workforce), with more than half of these departures coming from the company’s non-billable corporate functions.
As per reports, the company has allocated $1.2 billion for the severance of the workers who will be laid off.
With roughly $800 million anticipated in fiscal 2023 and $700 million anticipated in fiscal 2024, Accenture estimates $1.2 billion for severance and $300 million for office space consolidation.
Accenture’s Forecasts of Annual Revenue and Profit
The IT major also reduced its forecasts for annual revenue and profit.
Rather than the previously anticipated 8 to 11 percent, the IT company now anticipates an increase in annual revenue of between 8 and 10% in local currency.
Revenue for the current quarter is expected to be between $16.1 billion and $16.7 billion, according to the company.
In addition, the company stated that it anticipates earnings per share to be between $10.84 and $11.06 as opposed to the previous range of $11.20 to $11.52.
They also announced a $1.12 per share cash dividend for the quarter.
As per reports, $22.1 billion in new orders, $10.7 billion in consulting orders, and $11.4 billion in orders for managed services were placed during the quarter.
Julie Sweet, chair and CEO of Accenture, said after the earnings call, “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.”
Notably, Accenture’s third-quarter forecast fell short of Wall Street expectations.
A day after the US Federal Reserve increased interest rates by 25 basis points, this incident also occurred.