Accenture announced the axing of about 2.5 per cent of its workforce, or 19,000 jobs, in the latest indication of a gloomy global economic outlook engulfing the corporate sector in IT services.
More than half of the job cuts will impact employees at its non-billable corporate functions, Accenture said in an SEC filing Thursday. The company expanded its workforce by 38,000 employees in the fiscal year that concluded in February 2023, in response to a surge in demand for the company's services and solutions.
According to Accenture, in the second quarter of fiscal 2023, the rate of attrition, which does not include involuntary terminations, decreased to 12% compared to 18% in the second quarter of fiscal 2022.
The company stated that they analyze voluntary attrition, make adjustments to new hiring levels, and resort to involuntary terminations as a strategy to maintain a balance between their supply of skills and resources and changes in client demand.
The repercussions will send its shares up more than 4 per cent before the bell, Accenture, which expects annual revenue growth to be between 8 per cent and 10 per cent compared to the previous projection of an eight per cent to 11 per cent increase, said.
Cognizant Technology Solutions, a rival of Accenture, last month pointed to “muted” growth in bookings, or the deals IT services firms have in the pipeline, in 2022 after its first-quarter revenue forecast came in below market expectations.
Accenture anticipates earnings per share to be in the range of US$10.84 to US$11.06 compared to US$11.20 to US$11.52 previously.