Accenture puts 19,000 staffers' heads on the chopping block
2.5% of workforce to go as sales and margin growth forecasts dip
Accenture is erasing the jobs of 19,000 employees - with in-house IT workers confirmed on the front line - after it trimmed revenue projections for the rest of its current fiscal 2023.
The monster redundancy process involves some 2.5 percent of the existing 738,000-strong workforce that are spread across offices and operations in more than 200 cities in 49 countries.
Chief financial officer KC McClure delivered the devastating news on an earnings call to discuss profit and loss results for Accenture’s Q2 ended February 28 [PDF].
McClure said the business is initiating “business optimization actions” to “reduce costs” for fiscal 2024, and it expects to book in $1.2 billion in severance and some $300 million for “consolidation of office space.”
“These actions are expected to impact roughly 2.5 percent of 19,000 of our current workforce, of which over half are non-billable corporate functions and include over 800 of our more than 10,000 leaders.”
This means 50 percent are in departments including IT, HR, finance and marketing.
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The job cuts come despite Accenture, one of the largest cloud resellers on the planet, reporting $15.8 billion in revenue for its latest quarter, up 5 percent year-on-year, and an operating profit of $1.946 billion, albeit down against the $2.06 billion filed a year earlier.
The real reason for the caution centers on Accenture lowering forecasts for the remainder of its financial year, with revenue expected to grow between 8 and 10 percent rather than 8 and 11 percent, and operating margin to be in the range of 14.1-14.7 percent instead of 15.3-15.5 percent.
Almost half of the axed employees will be shown the door by Accenture by the end of the current financial year, McClure added on the earnings call.
The size of Accenture’s headcount reduction is similar to that of Meta, which is laying off 21,000 staff over two rounds, and Amazon, which is expunging 18,000. Google is laying off 12,000 and Microsoft some 10,000.
The payroll swelled for these companies during the pandemic. In the case of Accenture, for example, it has grown staff numbers by 30 percent since the start of June 2021, adding some 170,000 people.
So far this year, 513 tech companies have made redundant 150,000 employees. A Stanford Graduate School of Business boffin last month said he believes this is just copycat behavior rather than genuine fear of a recession, which now seems less likely to be deep should it happen. ®