Accenture will lay off 19,000 workers. In its earnings report on Thursday, the IT company reduced its annual revenue growth and profit forecasts.
On Thursday, Accenture, the IT consulting firm, announced that it would cut approximately 19,000 jobs or 2.5 percent of its workforce. According to the company, more than half of the layoffs would affect employees in non-billable corporate functions.
“While we continue to hire, particularly to support our strategic growth priorities, we initiated actions to streamline our operations and transform our non-billable corporate functions to reduce costs during the second quarter of fiscal 2023. These actions are expected to result in the departure of approximately 19,000 people (or 2.5% of our current workforce) over the next 18 months, with people in our non-billable corporate functions accounting for more than half of these departures, ” According to the company’s SEC filing.
They also stated that they have budgeted $1.2 billion for severance pay for employees who will be laid off.
Accenture financial figures
“Accenture estimates $1.2 billion in severance and $300 million in office space consolidation, with approximately $800 million expected in fiscal 2023 and $700 million expected in fiscal 2024,” they wrote.
The IT major also lowered its annual revenue and profit projections. The IT firm now expects its annual revenue growth to be 8% to 10% in local currency, up from 8% to 11%. The company expects revenue in the current quarter to be between $16.1 billion and $16.7 billion.
Furthermore, the company expects earnings per share to be in the $10.84 to $11.06 range, down from $11.20 to $11.52. They also declared a quarterly cash dividend of $1.12 per share.
For the quarter, new bookings totaled $22.1 billion, consulting bookings totaled $10.7 billion, and managed services bookings totaled $11.4 billion.
“We are also taking steps to lower our costs in the fiscal year 2024 and beyond while continuing to invest in our business and people to capture the significant growth opportunities ahead,” said Julie Sweet, chair and CEO of Accenture, said following the earnings call.
It’s worth noting that Accenture’s third-quarter forecast fell short of Wall Street expectations. This news comes just one day after the US Federal Reserve raised interest rates by 25 basis points.
