Accenture to Cut 19000 Jobs as IT Spending Slows

In the coming 18 months, Accenture PLC will eliminate around 19,000 employees, or 2.5 percent of its staff, as the professional services company strives to reduce expenses and increase operational efficiency in the face of a slowdown in IT spending.

In a statement on Thursday, the firm, which provides IT consulting as well as other business services, stated that the majority of the workers anticipated to be impacted will be in nonbillable corporate functions. To meet its “strategic growth initiatives,” Accenture stated it is currently hiring.

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The corporation stated that it anticipates spending around $1.5 billion on its business optimization plan between the remaining months of the present fiscal year and fiscal 2024, primarily from employee termination.

According to Chief Financial Officer KC McClure, Accenture employs around 738,000 employees worldwide and has grown by 28,000 over the past two quarters. Beyond what it stated in a 10-Q filing with the Securities & Exchange Commission (SEC), the corporation declined to comment on the cutbacks.

The consultancy business “recognized a chance to pursue more fundamental costs as per The Chief Executive of Accenture Julie Sweet. She added that Accenture has been addressing the issue of accumulating pay escalation through pricing, cost-saving measures, and digitalization.

The IT consultancy firm’s layoffs are associated with a recent wave of job losses as businesses in tech, manufacturing, and some other areas seek to reduce costs in the midst of concern over higher interest rates, ongoing inflation, and other economic issues.

However, until now, large technological businesses such as Amazon.com Inc., Alphabet Inc., & Meta Platforms Inc. mainly shielded IT positions from the massive job cuts.

For the very first time in over two years, the employment market for IT experts fell in January, an indication that as businesses cut spending, IT staffers are receiving the same level of scrutiny as employees in other jobs and industries.

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According to Victor Janulaitis, the CEO of consultancy firm Janco Associates Inc., a notable portion of the IT jobs getting eliminated or digitized are in data center operations and telecommunications, while there is still a significant skills deficit in fields such as cybersecurity & software development.

“What we are seeing is still a big demand for IT skills,” said Ray Wang, founder and principal analyst at IT consulting firm Constellation Research Inc. “While Accenture is managing to its shareholders, there are a large number of firms with 20% to 30% attrition that is happy to pick up folks from Accenture.”

Source: wsj.com