Global IT services provider, Accenture Plc, has announced that it will be cutting 2.5% of its workforce, or 19,000 jobs, as a result of a worsening global economic outlook, which is leading to reduced corporate spending on IT services. The company has also lowered its annual revenue and profit forecasts, with revenue growth now projected to be between 8% and 10%, down from its previous projection of 8% to 11% increase. Accenture has also revised its earnings per share estimate to be in the range of $10.84 to $11.06, compared to the previous range of $11.20 to $11.52.
More than half of the job cuts will affect staff at Accenture's non-billable corporate functions. This decision has sent the company's shares up more than 4% before the bell. The company is now following in the footsteps of its rival, Cognizant Technology Solutions, which recently announced muted growth in bookings, or the deals IT services firms have in the pipeline, for 2022.
The COVID-19 pandemic has been a catalyst for digital transformation, leading to an increased demand for IT services. However, the current economic outlook is leading to reduced corporate spending on such services, which is affecting the financial performance of IT services providers. Accenture's decision to reduce its workforce is a reflection of this trend.
Accenture's CEO, Julie Sweet, stated that the company's decision to reduce its workforce was not easy, but it was necessary. She also stated that the company will continue to invest in its growth strategy and transform its business to meet the evolving needs of its clients.
Despite the job cuts, Accenture remains committed to its sustainability goals. The company has set targets to reduce its greenhouse gas emissions by 50% and achieve net-zero emissions by 2025. The company has also committed to increasing the number of underrepresented groups in its workforce by 50% and achieving gender parity by 2025.