Consulting firm Accenture says to cut 19,000 jobs

NEW YORK: Tech consultancy Accenture announced Thursday it will be cutting around 19,000 jobs, or 2.5 percent of its workforce, spread over the next 18 months, as part of a cost-cutting effort.

In a filing with the US Securities and Exchange Commission, the Dublin-headquartered company said it expects to incur $1.5 billion in costs as a result of the downsizing, including $1.2 billion directly related to the layoffs.

About half of the jobs lost are in administrative or support functions, not in areas that lead to billing of customers, the company said.

"While we continue to hire, especially to support our strategic growth priorities... we initiated actions to streamline our operations," the company said in a release.

Accenture's most recent annual report said it had 721,000 employees in 2022.

The tech consulting and optimization company hired about 100,000 people in its 2022 fiscal year, which ended in August last year.

"We're going after structural costs, right, to ensure that we're in a better position," chief executive Julie Sweet said on an earnings call Thursday.

"We've been dealing with the difficult challenges of compounding wage inflation and we've been doing that with pricing but we've also been doing that with cost efficiencies and digitizing," Sweet said.

According to Sweet, the move is part of a context in which "everyone does want to be optimizing costs," especially in the technology sector, a major consumer of Accenture's services, given the uncertainty associated with the economic situation.

It is also consolidating some of its office space, and will incur $300 million in costs to do so, the company said.

The firm cited "significant economic and geopolitical uncertainty in many markets around the world, which has impacted and may continue to impact our business, particularly with regard to wage inflation and volatility in foreign currency exchange rates."

The company on Thursday reported better-than-expected revenue and net income for its second fiscal quarter ended in late February, but issued a more cautious forecast than the market.

At 1950 GMT (3:49 pm EDT), the company's shares were up 7.6 percent.

The company was spun off from the Chicago-based Arthur Andersen Group in 1989 and renamed Accenture in 2001, moving its headquarters to Bermuda.

It relocated to Ireland in 2009 as then president Barack Obama targeted overseas profits of corporations with headquarters in tax havens.