Accenture to Cut 19,000 Jobs Amid Concerns of Lower IT Spending Due to Global Economic Outlook

Accenture on Thursday lowered its annual revenue and profit forecasts and said it would cut about 2.5 percent of workforce, or 19,000 jobs, the latest sign that the worsening global economic outlook was sapping corporate spending on IT services.

More than half of the layoffs will affect staff at its non-billable corporate functions, the company said, sending its shares up more than 4 percent before the bell.

Accenture now expects annual revenue growth to be between 8 percent and 10 percent compared to the previous projection of 8 percent to 11 percent increase.

Last month, rival Cognizant Technology Solutions pointed to “muted” growth in bookings, or the deals IT services firms have in the pipeline, in 2022 after its first-quarter revenue forecast came in below market expectations.

Accenture said it now expects earnings per share to be in the range of $10.84 to $11.06 (roughly Rs. 890 to Rs. 900) compared to $11.20 to $11.52 (roughly Rs. 920 to Rs. 940) previously.

Meanwhile, US-based job search platform Indeed said on Wednesday it will cut about 2,200 jobs, or 15 percent of its workforce, joining a host of companies rationalizing their labour force following a pandemic-fuelled hiring boom.

Chief Executive Chris Hyams, who will take a 25 percent cut in base pay, said future job openings in general were at or below pre-pandemic levels and that the company was too large.

Corporate America has been laying off staff at a pace not seen since the financial crisis over a decade ago, bracing for an economic downturn triggered by aggressive rate hikes by central banks around the world.

© Thomson Reuters 2023