IT services firm Accenture lowered its annual revenue and profit forecasts on Thursday, with announcing plans to lay off 2.5% of its workforce, or roughly 19,000 employees. Nearly half of the affected staff are expected to leave the company "by the end of fiscal year 23," Chief Financial Officer KC McClure told analysts during the earnings call.
Accenture started taking a number of steps during the second quarter in order to reduce costs, including streamlining operations, consolidating office space, and transforming non-billable corporate functions. More than half of the recent layoffs are expected to affect staff at the non-billable corporate functions.
During the second quarter, the company recorded $244 million in business optimization costs and is likely to record total costs of roughly $1.5 billion through fiscal 2024 as per estimates. It expects $300 million for office space consolidation and $1.2 billion for severance, with nearly $800 million estimated in fiscal 2023 and approximately $700 million in the next.
Compared to the earlier projection of an 8% to 11% increase, Accenture now expects its annual revenue growth to fall anywhere between 8% and 10%, a report from Reuters said.
A few weeks back, rival Cognizant Technology Solutions had highlighted "muted" growth in bookings - or the deals such companies have in the pipeline - in 2022 after its first-quarter revenue forecast wasn't in line with the market expectations.
While job search company Indeed on Wednesday announced plans to cut 15% of its total workforce or approximately 2,200 jobs, entertainment major Disney has also reportedly asked managers to submit a list of current employees who will be laid off in the coming weeks. According to Business Insider, the latter could sack a minimum of 4,000 employees in April.
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