Accenture to lay off 19,000 employees amid global economic slump; revises profit forecasts

Accenture on Thursday said it would cut about 19,000 jobs, in a latest sign that the worsening global economic outlook was sapping corporate spending on IT services.

The company said it would cut about 2.5% of its workforce, in its non-billable corporate functions.

Accenture now expects annual revenue growth to be between 8% and 10% compared to the previous projection of 8% to 11% increase.

According to Rueters report, the company expects revenues for the third quarter of fiscal 2023 to be in the range of $16.1 billion to $16.7 billion, an increase of 3 per cent to 7 per cent in local currency, reflecting the company's assumption of an approximately negative 3.5 per cent foreign-exchange impact compared with the third quarter of fiscal 2022.

The company also reported financial results for the second quarter of fiscal ended February 28, 2023, with revenues of $15.8 billion, an increase of 5 per cent in US dollars and 9 per cent in local currency over the same period last year.

New bookings for the quarter were a record $22.1 billion, with consulting bookings of $10.7 billion and managed services bookings of $11.4 billion.

Why is there a layoff?

Many are wondering why there is a layoff. People are forgetting the fact that we live in an era of globalisation and a small impact in one part of the world could possibly impact everyone. It is because companies do not get funds from just one specific region alone or do not make business within the country. So, there will be a chain reaction.

Many IT companies including Microsoft, Amazon, Twitter, and Meta went on a hiring spree due to the lockdown-induced online shift of businesses during the pandemic and now cutting the cost as it impacted their growth.

The inflation and the fear of recession followed by the under-performance in the first quarter have made companies to play safe and take steps to reduce the expenditure.

Now, the companies are finding ways to increase the profits with lesser staff and boosting productivity.