Accenture Plc slashed its annual revenue and profit forecasts and decided to cut its workforce by about 2.5%, or 19,000 jobs, in the latest sign that the worsening global economic outlook may reduce corporate spending on IT services. Had been.
More than half of the jobs to be cut will be in non-billable corporate functions, Accenture said on Thursday, sending its shares up 6.4 percent.
Since the end of last year, the tech sector has laid off hundreds of thousands of workers due to falling demand due to high inflation and rising interest rates.
Rival Cognizant Technology Solutions last month pointed to a “muted” increase in bookings, or deals in IT services firms’ pipeline in 2022 and forecast lower-than-expected quarterly revenue.
IBM Corp and India’s top IT services firm Tata Consultancy Services also marked weakness in Europe, where the Ukraine war hit client spending.
Accenture now expects annual revenue growth to be between eight percent and 10 percent, compared to its previous estimate of eight percent to 11 percent growth.
Earnings per share is expected in the range of $10.84 to $11.06, compared to $11.20 to $11.52 previously. The company expects to incur $1.2 billion in severance costs through fiscal years 2023 and 2024.
“Companies remain focused on executing narrow changes,” Chief Executive Julie Sweet said in a post-earnings call on how businesses were trying to lean back in a turbulent economy.
A survey of more than 1,000 IT decision makers by US-based Enterprise Technology Research says they plan to reduce their 2023 budget growth. Growth expectations now stand at 3.4 per cent, down from 5.6 per cent growth expected in October 2022.
“In short, the data indicates a very difficult environment for consulting firms,” ​​said Eric Bradley, chief executive strategist at technology market research firm Eric Bradley.
– Reuters
Accenture after cutting 19,000 jobs: Here are all the details appeared first on Techlusive.
