Accenture, an IT services company, will cut 19000 jobs and lower its profit forecasts

Accenture Plc dropped its annual revenue and profit predictions and said on Thursday that it would cut about 2.5% of its workforce. This is the latest sign that the worsening global economic outlook is causing companies to spend less on IT services.
Accenture said that more than half of the 19000 jobs that will be cut will be in non-billable corporate functions. This made its stock go up by more than 4% before the bell.

Since the end of last year, the tech industry has fired hundreds of thousands of people because high prices and rising interest rates have caused a drop in demand.

Last month, Cognizant Technology Solutions, a competitor, said that “muted” growth in bookings, which are the deals that IT services companies have coming up, would happen in 2022 and that quarterly revenue would be lower than expected.

IBM Corp. and Tata Consultancy Services, the largest IT services company in India, have also warned of weakness in Europe, where the Ukraine war has caused clients to spend less.

Accenture now thinks that its yearly sales growth will be between 8% and 10%, whereas before it thought that it would be between 8% and 11%. The range of projected earnings per share is $10.84 to $11.06, down from $11.20 to $11.52 before.

In a post-earnings call, Chief Executive Julie Sweet said, “Companies remain focused on executing compressed transformations.” By this, she meant that businesses were still trying to get leaner in a rough economy.

Also read: 69-Year-Old US Man Accused Of Stealing $1.8 Million From Women On Dating Apps

Enterprise Technology Research in the United States asked more than 1,000 IT decision makers what they planned to do with their budget growth in 2023. Most of them said they would cut it. Now, 3.4% growth is expected, which is less than the 5.6% growth expected in October 2022.

Erik Bradley, the chief engagement strategist at the technology market research firm, said, “Our forward-looking technology spending intentions data for both IT Consulting and Outsourced IT are getting close to zero.”