Accenture to cut 19,000 jobs, trims forecasts

Managing director and corporate functions would be targeted

Accenture on Thursday announced that it would cut 19,000 jobs - or about 2.5 per cent of its workforce - over the next 18 months. This comes after McKinsey’s lay-off of 2,000 employees and KPMG’s 700.

In its filing to the US Securities and Exchange Commission (SEC), the company said, “During the second quarter of fiscal 2023, we initiated actions to streamline our operations, transform our non-billable corporate functions and consolidate our office space to reduce costs. We expect to record total business optimization costs of approximately $1.5 billion related to these actions, with approximately $800 million in fiscal 2023 and $700 million in fiscal 2024. This consists of approximately $1.2 billion of employee severance and other personnel costs.”

According to an email sent to employees, that was seen by DH, the company stated, “Our data shows that we can operate with fewer Accenture leaders (our managing directors) in some parts of our business and still drive growth. These departures will be mostly completed by the end of fiscal year ‘23.”

Elaborating on the other roles that are set to be axed, it said, “We will transform our corporate functions through the expanded use of our SynOps platform and other data, AI and technology, the use of more cost-effective locations and new ways of working.” The email added that this transformation accounts for about half of the company’s total departure and will take place over the next 18 months.

The other cost pruning involves cutting down office space by 25 per cent and balancing the supply of skills below managing directors.

Responding to a DH query, the company spokesperson stated, “The people impact is estimated to be 2.5 per cent of our current global workforce. This may differ by market and by country, as a consequence of our different footprint and growth, and should not be taken as a figure applicable to all geographies.” The person additionally informed that India has over three lakh employees. However, the lay-offs cannot be approximated based on the overall 2.5 per cent quotient stated by the company as the impact will vary from country to country.

Interestingly, the company said it is expecting strong growth of 8-10% in the current financial year, though it is much lower than the 26 per cent growth it posted in the previous year.