A tech consulting giant, that reported a whopping revenue of $US61.6 billion ($92.1) last year, has revealed it will slash 19,000 jobs including in Australia.
Accenture’s cuts will impact 2.5 per cent of its global workforce as it anticipates lower demand for its services.
Half of the jobs expected to be impacted are back office roles with cuts expected to take place over the next 18 months, with the news boosting its share price by 6.5 per cent after the announcement.
Accenture’s cost cutting exercise is expected to slug the firm $US1.5 billion ($2.2 billion) in charges associated with the cost cutting, including “$US1.2 billion of employee severance and other personnel costs” and another “$US300 million of costs related to the consolidation of office space”.
“While we continue to hire, especially to support our strategic growth priorities, during the second quarter of fiscal 2023, we initiated actions to streamline our operations and transform our non-billable corporate functions to reduce costs,” the firm said in a US corporate filing.
It’s the latest tech giant to announce sweeping cuts to its workforce after Amazon said this week it would cut thousands more jobs.
However, Accenture’s expected drop in revenue wasn’t hugely below previous forecasts.
It was predicting annual revenue growth to be between 8 per cent and 10 per cent compared to the previous projection of 8 per cent to 11 per cent increase – but it said it was being battered by the worsening global financial situation.
“Our results of operations are affected by economic conditions, including macroeconomic conditions, the overall inflationary environment and levels of business confidence,” it said.
“There continues to be significant economic and geopolitical uncertainty in many markets around the world, which has impacted and may continue to impact our business, particularly with regard to wage inflation and volatility in foreign currency exchange rates.
“In some cases, these conditions have slowed the pace and level of client spending.”
The company added it had to sack staff to keep up with “client demands”.
“For the second quarter of fiscal 2023, attrition, excluding involuntary terminations, was 12 per cent, down from 18 per cent in the second quarter of fiscal 2022,” it wrote.
“We evaluate voluntary attrition, adjust levels of new hiring and use involuntary terminations as a means to keep our supply of skills and resources in balance with changes in client demand.”
The grim news just doesn’t stop with Accenture with the ‘tech wreck’ getting a whole lot worse with Amazon announcing that 9000 jobs will be slashed adding to the 18,000 roles it cut just two months ago.
The cuts will take place in coming weeks and are mainly concentrated in Amazon’s web, HR and advertising team. Staff who look after Amazon’s foray into Twitch lifestreaming are also set to be impacted.
In total, 27,000 roles have been cut this year.
Facebook owner Meta, also announced mass job redundancies just last week.
Meta chief executive officer Mark Zuckerberg told employees that his company was laying off another 10,000 employees and closing about 5000 additional open roles in its own second major round of job cuts.
Earlier this year, Google’s parent company Alphabet enacted large-scale restructuring, announcing that 12,000 jobs would be cut globally.
Closer to home, Australia has also been pummelled by the tough economic conditions.
Earlier this month, ASX-listed software firm Xero announced that it was going to reduce its headcount by 700 to 800 roles, which was a 15 per cent cut to the overall workforce.
A few days earlier, software giant Atlassian slashed 500 roles, which represents five per cent of its total global workforce.
Also blaming client requirements, one of the big four accounting firms KPMG Australia has pinned 200 roles for redundancy after a drop in demand from clients due to worsening economic condition.
Another software development company, Kinde, laid off 28.5 per cent of staff at the end of last month.
Also in February, fintech Finder laid off or restructured 15 per cent of its workforce.