IT Services Firm Accenture To Cut 19,000 Jobs, Trims Profit Forecasts

Accenture Plc, the latest indication that the worsening global economic picture was sapping corporate expenditure on IT services, slashed its annual revenue and profit expectations and announced on Thursday that it will reduce approximately 2.5% of its workforce.

Accenture announced that more than half of the 19,000 employees to be lost will be in its corporate activities that are not billable, which caused its shares to increase by more than 4% before the bell.

Due to a decline in demand brought on by high inflation and rising interest rates, the tech sector has been forced to lay off hundreds of thousands of workers since late last year.

Competitor Cognizant Technology Solutions forecasted quarterly revenue below forecasts and referred last month to “muted” increase in bookings, or the agreements IT services businesses have in the works.

A slowdown in Europe, where the Ukraine war has hurt client spending, has also been noted by IBM Corp. and Tata Consultancy Services, India’s biggest IT services provider.

In contrast to its prior prediction of an increase of 8% to 11%, Accenture now anticipates yearly revenue growth to be between 8% and 10%. As opposed to the previous range of $11.20 to $11.52, the estimated earnings per share are in the range of $10.84 to $11.06.

According to a US-based Enterprise Technology Research poll of more than 1,000 IT decision makers, they intend to slow the growth of their budgets by 2023. Now, 3.4% growth is expected, down from a 5.6% gain recorded in October 2022.

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