Like other companies around the globe, professional services giant Accenture is dealing with the stress of doing business in a global pandemic.
The New York-listed company has completed deals during COVID, including signing an agreement with Anglo American, a global mining company, to extend Accenture’s partnership as strategic IT services provider to 2023. In addition, it partnered with Verizon in April on a new initiative to bring together workers whose jobs have been lost due to the pandemic and the companies that are doing well despite current world events.
Yet now it looks like many of Accenture’s employees around the world are going to find themselves on the unemployment line. CEO Julie Sweet recently held a virtual internal staff meeting, explaining that the company identified “real areas of efficiencies,” which could lead to the company laying off 5 percent—or around 25,000—of its global workforce.
Accenture’s revenue streams have suffered as a result of the pandemic. Although the company’s revenue grew by 1.3%, it was well below expectations and the firm reduced its forecast for the fiscal year from 6 to 8%, to 3 to 6%. Forbes also recently predicted that the company’s stock—up 16% since the beginning of this year—is due for a downgrade.
A note to staff, which was obtained by the Guardian, explained: “We went into the crisis with an overcapacity of people relative to demand. The crisis has caused additional strain on the business due to lower demand and reduced national attrition. In addition, we have identified structural costs that we need to address.”
In addition, Accenture revealed that it had already started slashing costs by decreasing travel, reducing contractor numbers, and pausing recruitment but “unfortunately these numbers have not been enough.”
In the meantime, the company is making moves to boost business, including a recent strategic investment in InCountry, a data residency-as-a-service platform provider that allows enterprises and SaaS companies to ensure their company and customer data is used in compliance with the data residency regulations of more than 90 countries. Accenture plans to use the InCountry solution within its myNav cloud platform. These moves will help companies like Accenture to continue to develop their offerings, despite additional strain resulting from the pandemic.
