Accenture Job cuts: Accenture has reduced its global workforce by more than 11,000 in the past three months and signaled that further job cuts could follow if employees cannot be retrained for the age of artificial intelligence. The IT consulting giant on Thursday detailed an $865mn restructuring programme alongside an outlook reflecting weak corporate demand for consulting projects and reduced US federal spending.
Compressed Timelines for Reskilling
“We are exiting on a compressed timeline people where reskilling, based on our experience, is not a viable path for the skills we need,” chief executive Julie Sweet told analysts on a conference call.
The company employed 779,000 people at the end of August, down from 791,000 three months earlier. While Accenture did not specify how many jobs were directly impacted by the restructuring, severance and other costs totaled $615mn in the last quarter, with an additional $250mn expected in the current three-month period.
Revenue Growth Slows, AI Focus Increases
Despite the cuts, Accenture maintained that it would continue to expand operating profit margins at its historic annual rate of at least 10 basis points in the next fiscal year. The company reported revenues of $69.7bn in the year to August, up 7 per cent, with a net income of $7.83bn, up 6 per cent.
While large-scale digital transformation work remains strong, short-term consulting projects have seen reduced demand over the past two years. Accenture predicted revenue growth of 2–5 per cent in the fiscal year just started, citing the US federal government clampdown on spending, which historically accounted for about 8 per cent of its revenue.
Investing in AI Talent
Accenture said generative AI projects accounted for $5.1bn of its new bookings in the year just ended, up from $3bn the previous year. “We are investing in upskilling our reinventors, which is our primary strategy,” Sweet said, noting that the company now has 77,000 AI or data professionals, up from 40,000 two years ago.
Accenture shares fell 2.7 per cent on Thursday, closing at their lowest level since November 2020. Sweet added that overall headcount would grow again in the coming year as the company focuses on AI and data expertise.