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Accenture to Cut 19000 Jobs as IT Spending Slows

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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.

Accenture
Image Source: wsj.com

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.

Also Read: Amazon to Cut 9,000 More Jobs, Deepening Biggest Pullback Ever

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.

Also Read: Google begins opening access to its ChatGPT competitor Bard

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
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Accent on the Future: Success Story of Accenture

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Accenture is one of the largest professional services companies in the world and provides consulting for a wide range of operations. They are one of the biggest multinational companies in finance, consulting and management. With revenues over $39.6 billion, and operations in more than 120 countries, this Fortune 500 Company is a global leader in consulting services. So, how did Accenture’s story start, and who is responsible for this stellar growth?

About the Author

Arthur Edward Andersen was born in 1885 in Illinois to Norwegian immigrants. His parents died when he was 16, leaving Andersen to fend for himself. He graduated from Northwestern University with a degree in business by struggling through night courses. Andersen worked as a full-time mail boy while he was at college, to support himself financially.

Following his graduation, he started working in Chicago as the controller of Allis-Chalmers. He became a Certified Accountant in 1908, becoming the youngest person to do so in Illinois. While serving as an accountant, he worked as a professor at Northwestern. A couple of years later, in 1913, he formed Andersen, Delany & Co, with Clarence Delaney. Five years later, Andersen bought Delaney out, and the firm became Arthur Andersen & Co.

Founding Accenture

Accenture initially came under an accounting firm called Arthur Andersen LTD. They handled payroll processing operations and other such outsourced processes. The company was mainly based in Kentucky. In the 1950s, the accounting firm Arthur Andersen was helping General Electric with a feasibility study regarding the use of computers. This was the first time computers were used for commercial applications in the US. Andersen got the job thanks to his Joseph Glickauf, who was an early pioneer of computer consulting, working at the firm.

From Andersen to Accenture

After the split, Andersen Consulting had to pay Arthur Andersen 15% of its profits annually. Meanwhile, Arthur Andersen competed against Andersen Consulting via Arthur Andersen Business Consulting. This led to heated arguments and disputes. In 1998, Andersen Consulting claimed a breach of contract against Arthur Andersen.

Two years later, as per the guidelines stated by the International Chamber of Commerce, the two companies severed all ties. As a settlement, Andersen Consulting paid Arthur Anderson $1.2 billion and renamed itself Accenture. “Accenture” comes from a combination of the accent and future of the word, as per the phrase “Accent on the future”. Kim Petersen, an employee from the Norway office submitted the name through an internal competition. They launched their IPO in 2001, at $14.50 per share, on the New York Stock Exchange.

A Stellar Success

The IPO helped Accenture raise $1.7 billion and the day closed with the shares at $15.17. Accenture employs over 459,000 people and has clients in more than 200 cities around the world. In India alone, Accenture employs more than 150,000 technicians. As the company grew, so did their client base, and Accenture now serves 92 of the Fortune 100 and three-quarters of the Fortune 500. The company was incorporated in Ireland in 2009, becoming Accenture plc. HealthCare.gov initiate chosen them as the lead contractor in 2014 for $563 million. The following year, they won a Defense contract from the US, valued at $4.33 billion.

In 2017, Apple Inc. announced that it would be partnering with Accenture to develop iOS software. A year later, they generated $4.060 billion, growing by over 13.4% compared to the previous year.
Currently, Accenture’s shares are worth $159 per share, and the company is worth over US$104.2 billion. It is safe to say that Arthur Andersen gave the world one of that biggest companies in the world, and is hence, rightfully a member of the Accounting Hall of Fame.