Accenture Announces Layoffs of 19,000 Employees and Decreases Revenue Forecast.

Accenture, a company focused on consulting services, has announced that they will be terminating 19,000 employees as well as reducing their revenue projections.

According to Accenture, over 50% of the 19,000 job cuts will impact employees involved in its non-chargeable administrative tasks.

On March 23, 2023 at 5:34 PM in Indian Standard Time.

On March 23, 2023 at 5:34 PM in Indian Standard Time.

On March 23rd, 2023 at 6:55 PM, Indian Standard Time, the following blog section was posted.

A picture of the Accenture sign on a structure located in Davos, Switzerland has been captured by Vijay Sartape, a BQ Prime photographer.

Accenture Plc has decreased its forecasted revenue growth for the fiscal year ending on August 31, 2023. Additionally, they have revealed that they will be implementing job cuts due to diminished client spending following the widespread banking crisis that has occurred in both the United States and Europe.

Even though, the company exceeded projected earnings for the second quarter. The monetary gain for the most precious information technology services company worldwide escalated to $15.81 billion, a 5.1% increase compared to the previous year. This result overshadowed the projected estimate of $15.56 billion that was predicted by experts monitored by Bloomberg.

Last year, the operating margin was at 13.7%, but now it has decreased to be 12.3%.

The earnings for each individual share were $2.39, which is lower compared to the earnings of $2.54 during the same period last year.

The percentage of profit left after subtracting the cost of goods sold from the revenue was 30.6%, which exceeded the predicted margin of 30.4%.

There was a 9.66% decrease in technology earnings compared to the same time last year, totaling $2.88 billion instead of the expected $3.2 billion.

The revenue for BFSI increased by 4.6% compared to the previous year, reaching a total of $3 billion. This exceeded the estimated revenue of $2.98 billion.

The income earned from products increased by 9% compared to the previous year, reaching a total of $4.72 billion. This exceeded the estimated earnings of $4.61 billion.

The income from resources increased by 11% compared to the previous year, reaching a total of $2.18 billion. This exceeded the initial estimate of $2 billion.

In the second quarter, the company received an exceptional amount of new bookings worth $22.1 billion. The bookings were divided into two categories: $10.7 billion for consulting services and $11.4 billion for managed services.

Julie Sweet, the head honcho and top executive at Accenture, expressed in a statement that the company's impressive financial performance for the quarter showcases their unique approach of combining industry, functional, and technology expertise with managed services, giving them an edge over their clients.

The fact that we have received so many bookings is a clear indication that our clients believe in us and have confidence in our ability to bring them value and help them make rapid changes.

The company based out of Dublin anticipates earning between $16.1 to $16.7 billion during the months of March to May, which is a 3 to 7% boost. This estimate is slightly less than their earlier projection of 16.59 billion. Their prediction for the entire year is that revenue will increase by 8 to 10% instead of the previously anticipated 8 to 11%.

Accenture has announced that it will be reducing its workforce by 19,000 employees. This represents 2.5% of their total workforce of 738,000, with the majority being employees who work in corporate functions that are not billable. During the second quarter, the company spent $244 million on business optimisation costs, and now estimates that they will need to spend $1.2 billion on severance and $300 million to consolidate office space. This expenditure will be spread across two fiscal years, with $800 billion being spent in 2023 and the rest in the following fiscal year.

Sweet stated that we are implementing measures to reduce expenses in the year 2024 and beyond. However, we are still committed to investing in our company and employees to take advantage of the promising growth possibilities in the future.

In the second quarter, 12% of employees left the company, which is a lower rate than the 18% from the same period last year.

Accenture's earnings report and predictions are regarded as a measuring stick for India's thriving $227 billion information technology sector, which is anticipated to begin the 2024 fiscal year in a challenging manner.

Industry experts predict that the banking crisis in the United States and Europe, which are the top markets for Indian IT companies, may result in a decrease in optional spending by customers in the immediate future.

Kotak Institutional Securities has stated in a report that they anticipate a decrease in growth during FY24. This is likely to occur through a feeble performance in the March 2023 quarter, with a slight improvement in the first quarter of the financial year, followed by a return to normal levels in the second quarter. It has also been suggested that the current issues in the banking industry may result in a slowdown of 1-2% during the first quarter of FY24.

Tushar Deep Singh works as a journalist specializing in business matters, and is located in Mumbai city.