Shulou(Shulou.com)11/24 Report--

Thanks to CTOnews.com netizen Intel for the clues of toothpaste delivery! On Thursday, local time, Accenture, a professional consulting service, announced that it would cut about 19000 jobs, or 2.5% of its workforce, over the next 18 months. As IT spending slows, the company wants to cut costs and streamline operations.

Accenture estimates that most of the employees affected are "non-paid hours", jobs that do not generate direct revenue. However, the company said it was still hiring staff to support its "strategic growth focus". The business optimization plan is expected to cost about $1.5 billion, most of which comes from employee severance payments for the rest of the fiscal year and fiscal 2024.

Accenture Chief Financial Officer KC McClure (KC McClure) said on a conference call with analysts Thursday that the company has about 738000 employees worldwide, compared with an increase of 28000 in the previous two quarters. The company declined to comment on the layoffs except for the information contained in regulatory filings with the Securities and Exchange Commission (SEC).

Julie Sweet, Accenture's chief executive, said the company had "identified opportunities to eliminate more structural costs". Accenture has also been trying to meet the challenge of "rising wages" through repricing, cost-effectiveness and digitization, she said.

Accenture's layoffs come at a time when another wave of layoffs broke out recently. Companies in technology, manufacturing and other sectors are looking to cut costs because of rising interest rates, persistent inflation and increased uncertainty caused by other economic challenges. Previously, massive layoffs at large technology companies such as Amazon, Alphabet and Meta did not have much impact on jobs in IT.

In January, the job market for information technology majors shrank for the first time in more than two years, a sign that IT employees are facing the same challenges as other jobs and industries as companies slow spending.

It is worth noting that many of the IT jobs that have been cut or automated come from data center operations and telecommunications, while there is still a huge talent gap in areas such as network security and software development, said Victor Janulaitis, chief executive of consulting firm Janco Associates.

"We see that the demand for IT talent is still high," said Wang Ruian, founder and chief analyst of Constellation Research, an IT consultancy. "although Accenture is responsible for shareholders, there are a large number of companies with turnover rates of between 20 and 30 per cent, and they are happy to poach people from Accenture."

Cogizant Technology Solutions, another IT consulting and outsourcing service provider, reported a slowdown in quarterly earnings growth in February. While revenue in its communications, media and technology divisions grew 9%, Cognizant chief financial officer Jan Siegmund said on an earnings call that spending growth for its biggest customer had slowed and that the company was watching changes in the technology industry.

McKinsey said last month that it could cut as many as 2000 of its existing 45000 employees.

Accenture's job cuts come as analysts expect total global IT spending to reach $4.5 trillion in 2023, up 2.4% from last year, but less than half of what Gartner, a research and IT consultancy, predicted in October. Consulting firms such as Accenture are often hired by large companies to participate in major IT upgrades, says Tim Crawford, a strategic consultant at AVOA, a Los Angeles-based corporate IT consultancy.

Mr Crawford adds: "as demand from corporate customers falls, so will Accenture's staff demand. This does create a weather vane that large projects are downsizing, as we saw about six months ago."

In the face of continuing economic uncertainty, technology executives are already looking for innovative ways to work with a smaller budget than they did a few years ago. In January, Capital One Financial laid off about 1100 employees on a team in its technology division, which had focused on using faster, more flexible software development methods.

Accenture's chief financial officer, Mr. McClure, said on an analyst conference call Thursday that Accenture is still consolidating some of its office space.

Accenture on Thursday reported quarterly revenue of $15.8 billion, up 5 per cent from a year earlier. The company also cut its revenue growth forecast for this year to 8% to 10% from the previous 8% to 11%. In a conference call on Thursday, Sweet noted growth in the company's communications, media and technology divisions in Europe, especially as customer growth slowed in North America.

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