Consulting firm Accenture PLC will cut 19,000 jobs which is approximately 2.5% of its workforce. The company said it expects to insure $1.2 billion in employee severance and personnel costs.
According to a report in Fortune magazine, this is the latest sign of economic uncertainty that has affected not just consultancies but also the tech and finance industries. Just last month another big consulting firm, McKinsey & Co said it would axe 2,000 jobs while KPMG said it has cut almost 700 professionals from its US advisory practice.
The company currently employs 738,000 people globally and added 28,000 people in the last two quarters. It’s chief executive officer, Julie Sweet said that the firm had “identified an opportunity to go after more structural costs.”
Accenture Cuts
She added that Accenture has also been dealing with the challenge of compounding wage inflation through pricing, cost efficiencies and digitizing.
“Our record bookings reflect the confidence and trust that our clients have in us to create value and help them transform at speed. We are also taking steps to lower our costs in fiscal year 2024 and beyond while continuing to invest in our business and our people to capture the significant growth opportunities ahead,” said Sweet.
Moody’s Investors Service vice president Ignacio Rasero said that Accenture’s credit profile remains strong.
“The job cuts reflect stabilizing demand, following explosive post-pandemic growth, and prudent cost management, Accenture’s diversified business and industry mix helps offset weakness in specific sectors such as technology, and provides stability. Long term demand prospects for Accenture’s services remain high as the company continues to benefit from digital transformation trends.”
Administrative cuts
About half of the job cuts are in the administrative and support segments not in the billing department.
“While we continue to hire, especially to support our strategic growth priorities… we initiated actions to streamline our operations,” said a company press release.
The firm announced that it would also be consolidating its office space, and will incur US$300 million in costs to do so.
Note: The photo above is from Corporate Office Head Quarters