Accenture trims forecasts, to cut 19,000 jobs as IT spending slows
Reuters
Published Mar 23, 2023 06:48AM ET
Updated Mar 23, 2023 12:11PM ET
By Chavi Mehta
(Reuters) -Accenture Plc lowered its annual revenue and profit forecasts and decided to cut about 2.5% of its workforce, or 19,000 jobs, the latest sign that the worsening global economic outlook was sapping corporate spending on IT services.
More than half of the jobs to be cut will be in its non-billable corporate functions, Accenture (NYSE:ACN) said on Thursday, sending its shares up 6.4%.
Since late last year, the tech sector has laid off hundreds of thousands employees due to a demand downturn caused by high inflation and rising interest rates.
Rival Cognizant Technology Solutions (NASDAQ:CTSH) last month pointed to "muted" growth in bookings, or the deals IT services firms have in the pipeline, in 2022 and forecast quarterly revenue below expectations.
IBM (NYSE:IBM) Corp and India's top IT services firm Tata Consultancy Services have also flagged weakness in Europe, where the Ukraine war has affected client spending.
Accenture now expects annual revenue growth to be between 8% and 10%, compared with its previous projection of a 8% to 11% increase.
Earnings per share is expected in the range of $10.84 to $11.06 compared with $11.20 to $11.52 previously. The company expects to incur $1.2 billion in severance costs through fiscal 2023 and 2024.
"Companies remain focused on executing compressed transformations," Chief Executive Julie Sweet said in a post-earnings call referring to how businesses were trying to become leaner in the turbulent economy.
A survey of more than 1,000 IT decision makers by U.S.-based Enterprise Technology Research said they plan to reduce their 2023 budget growth. The growth expectations are now 3.4%, down from 5.6% increase captured in October 2022.
"In short, the data indicates a very difficult environment ahead for consulting firms," said Erik Bradley, chief engagement strategist at the technology market research firm.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.