Accenture, a leading global professional services firm, has announced plans to cut approximately 19,000 jobs over the next 18 months, citing rising costs and an uncertain economic outlook. This is the largest cut seen across the consulting sector, and it is expected to hit about 2.6% of Accenture’s 738,000 staff, who provide consultancy and outsourcing services to large companies. The company expects to incur staff severance costs of $1.2 billion and a further $300 million of expenses from the consolidation of office space.
We have already written about the current economic slowdown and how it affects consulting applications here. McKinsey has already announced plans to let go of 2,000 employees.
The retrenchment will affect more of the staff who work in corporate functions rather than serve clients directly. Half of the 19,000 employees will leave by the end of August. Accenture is characterizing the cuts as “offensive” rather than defensive, to ensure Accenture keeps to its long-term profitability targets in a high-inflation environment. The company is identifying an opportunity to go after structural cost and ensure profitability.
Despite the cuts, Accenture has secured a record $22.1 billion of bookings for new work during the three months to February. The company has also trimmed its estimated revenue growth for the financial year to the end of August to between 8 and 10 per cent from 8 to 11 per cent previously. However, the company said it would continue to hire staff “especially to support our strategic growth priorities”.
Accenture has enjoyed explosive growth in recent years as demand for advice on tech projects from multinationals ballooned. It has been on a hiring binge, adding more than 230,000 staff since August 2020. The company provides services in strategy, consulting, digital, technology, and operations.
Headquartered in Dublin, Ireland, Accenture has a global presence, with operations in more than 50 countries, including India and the Philippines, where it has large offshore delivery centers. It serves clients across a wide range of industries, including financial services, healthcare, and communications. In 2021, Fortune ranked Accenture as the world’s most admired Information Technology Services company.
The company has previously committed to reducing its carbon emissions and is a signatory to the United Nations Global Compact, which is a voluntary initiative designed to encourage businesses to adopt sustainable and socially responsible policies. Accenture’s corporate citizenship efforts are focused on fostering equality and building a more sustainable future.
In conclusion, Accenture’s decision to cut jobs is part of a broader trend across the consulting sector, which has been hit hard by rising costs and economic uncertainty. However, the company remains optimistic about its long-term prospects and plans to continue hiring staff to support its strategic growth priorities. As a leading global professional services firm, Accenture is committed to sustainability and corporate citizenship, and it will likely continue to play a significant role in shaping the future of the consulting industry.