Global professional services company Accenture Plc announced plans to cut 19,000 jobs–or roughly 2.5% of its global workforce–over the next 18 months, marking one of the largest rounds of cuts as the consulting industry braces itself for potential tough economic times ahead. Record inflation, supply chain disruptions, and increasing global instability are driving many large companies to reduce their headcounts in an effort to tighten margins, with the tech industry announcing record-high layoffs in early 2023.
Accenture stated that it expects to incur $1.2 billion in employee severance and other personnel costs alongside plans to spend an additional $300 million on office space consolidation. The company also lowered its revenue growth forecasts, projecting growth between 8% and 10% this fiscal year, down from a previous projection of 8% to 11%. More than half of the planned cuts will impact workers in non-billable corporate roles including human resources, financial, and legal departments.
The move comes at a time when consulting firms are facing growing economic uncertainty after a decade of rapid expansion, with firms such as McKinsey & Co announcing plans to cut 2,000 jobs and KPMG reporting cuts of 700 professionals from its U.S. advisory practice due to slowing demand. Big Four firm EY is also preparing to tighten its belt, reporting plans to reduce hiring targets by thousands of jobs. Accenture’s planned reductions in force are the largest announced so far, coming only 16 months after it pledged to create 3,000 tech jobs in the U.K., a pledge a company spokesperson claims still stands.
Accenture Chief Executive Officer Julie Sweet stated that the company is “taking steps to lower our costs in fiscal year 2024 and beyond, while continuing to invest in our business and our people.”
Markets responded favorably to the announcement, with Accenture shares climbing as much as 8.5% in New York and the company reporting that bookings rose to a record $22.1 billion in its second quarter, a 13% increase from the same period last year, beating estimates. Revenues also rose 5% to $15.8 billion, with more than half of the company’s total new bookings coming from managed services, with consulting making up the rest.