Professional services company Accenture announced plans to cut 19,000 jobs globally, which represents 2.5% of its workforce, as part of its cost-cutting efforts amid a gloomy economic picture.
The Irish-American company said it would spend $1.2 billion in severance over the next 18 months and another $300 million to consolidate office space. More than half of the cut jobs would come from back-office staff, the company said. Despite the job cuts, Accenture said it would continue hiring while streamlining operations and reducing costs on non-billable corporate functions.
Accenture’s rivals, KPMG and McKinsey, are also trying to trim their costs, as well as the tech industry, where thousands of workers have been laid off in recent months due to higher interest rates, inflation, and recession fears.
Accenture Downgrades Revenue Growth Outlook
The $167 billion company downgraded its revenue growth outlook for the 2023 fiscal year from its previous estimate of between 8% and 11% to between 8% and 10%. The job cuts and the revenue downgrade came amid a sluggish economic outlook and a decline in client demand. Accenture’s shares, listed on the New York Stock Exchange under ACN, rose 3.9% to $263 apiece in early trade after the announcement. The stock is down more than 5% over the past 12 months.