Accenture stated on Thursday that it will eliminate around 19,000 positions, or 2.5% of its staff. The corporation indicated that more than half of the layoffs will affect non-billable corporate functions personnel.
“During the second quarter of fiscal 2023, we took steps to simplify our operations and restructure our non-billable corporate services in order to decrease expenses, while continuing to employ, especially to support our strategic growth targets. These steps are anticipated to result in the departure of roughly 19,000 workers (or 2.5% of our existing workforce) over the next 18 months, with more than half of these departures involving employees in non-billable corporate responsibilities “according to the company’s SEC filing.
They had put aside $1.2 billion for severance pay for the laid-off workers.
“Accenture predicts $1.2 billion for severance and $300 million for office space consolidation, with about $800 million anticipated in fiscal 2023 and $700 million in fiscal 2024,” they stated.
Moreover, the IT giant cut its yearly sales and profit forecasts. The IT business now anticipates its annual sales growth to range between 8% and 10% in local currency, as opposed to 8% to 11% previously. Revenue projections for the current quarter vary between $16.1 billion and $16.7 billion.
In addition, the business expects earnings per share to range from $10.84 to $11.06 as opposed to $11.20 to $11.56 before. Also, they declared a quarterly dividend of $1.12 per share.
New bookings for the quarter totaled $22.1 billion, including $10.7 billion for consultancy and $11.4 billion for managed services.
During the results call, Julie Sweet, chair and chief executive officer of Accenture, stated, “We are also taking efforts to reduce our expenses in fiscal year 2024 and beyond, while continuing to invest in our company and our people to grasp the enormous growth possibilities ahead.”
Notably, Accenture’s prediction for the third quarter was below Wall Street forecasts. In addition, this occurrence occurs one day after the US Federal Reserve increased interest rates by 25 basis points.
