Accenture is reportedly cutting as many as 25,000 jobs from the consulting, technology and outsourcing service provider's 500,000-strong global staff as growth slows amid the coronavirus pandemic.
The Dublin-based company is targeting workers in the bottom five percent based on their performance, achievements and skills, as reported by the media.
"Right now, we're not in a demand scenario, so if we manage out the same percentage of people and don't replace them, it allows us to continue to invest and preserve some people who have lower chargeability for when the market comes back," Chief Executive Julie Sweet said, as quoted in the media.
Sweet also shared that the company's growth fell to 1.3 percent following the pandemic from eight percent in February. "This year, in addition to the normal five perent, we've identified more people who need improvement. ... So we're making sure ... if we have to make other actions, we know where our performance is," Sweet said.
According to the report, Sweet had said "chargeability", or the amount of working hours its staff could attribute to paying clients, had dropped below 90 percent for the first time in a decade, and performance metrics were being used to target staff to "transition out" of the company.
"She said that despite cutting subcontractors and halting fresh recruitment, the company still needed to reduce numbers," the report said.
Layoffs at Accenture first came to light when the US media reported about hundreds of jobs cuts in the UK. According to a 1 July report in The Guardian, the company was slashing up to 900 jobs in the UK to reduce costs in the face of lower demand for its services. The New York-listed company employs 11,000 people in offices across the UK including in Aberdeen, London, and Cambridge.
Accenture shared with People Matters, “At this time we are not planning extraordinary global workforce actions. Every year, as part of our performance process, we have conversations with our people about how they are performing, areas for improvement, their potential to progress, and whether they are a long term fit for Accenture.
This year, across all parts of our business and all career levels, we will identify approximately five perscent of our people as our lowest performers, and these individuals will transition out of Accenture. This is consistent with our actions each year.
We continue managing our business for the long term and critical to this is ensuring we have the right people with the right skills to best serve our clients. In India, we continue to hire, and as part of our ongoing compensation programs, we also recently recognized a number of our people with bonuses and promotions.”
Recently, US-based IT major Cognizant announced its results for the April-June quarter, which revealed that the company’s headcount had reduced by 10,500 people in the quarter. IBM too has reportedly laid off about 2,000 employees globally.