Accenture Layoffs 2023. In March 2023, Accenture announced it would lay off 19,000 workers by 2024. This layoff has proven to be one of the largest layoff rounds in the history of tech companies. Accenture took over many companies last year. Due to this, the company has hundreds or even thousands of new employees in the same year.
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About Accenture
Accenture Inc. is a Dublin-based professional services company founded in 1989. The company specializes in consulting and Information technology (IT) services. It is estimated that the company generated around 61.6 billion US dollars in revenue last year. Accenture has become the largest consulting firm regarding the number of employees. Regarding its current clients, it has around 91 clients of the Fortune Global 100, along with more than three-quarters of the Fortune Global 500. In September 2019, Julie Sweet was appointed as CEO of the company.
Accenture Earnings Report
The company released the second fiscal quarter’s financial results in March. Accenture is a Dublin-based IT company. That generated around 15.8 billion US dollars in sales. It shows that there is a 5 percent growth year over year. Moreover, managed services sales represented around 12 percent growth due to this growth. On the contrary, a 1 percent reduction in consulting revenue was also seen. New bookings were reported to be 22.1 billion US dollars for the fiscal year quarter.
During Accenture’s financial earnings report, The CEO of the company, Julie Sweet, said. “The company’s record bookings helped us to build confidence and trust. So that we can help our clients and create value to transform the overall structure at speed.”
She added, “To reduce our costs in the future, we are taking steps. So we have continued to invest in our business and people. This way, we can observe the significant growth opportunities in fiscal year 2024 and beyond.”
In the US Securities and Exchange Commission, the company said, “In an attempt to support the company’s strategic growth, we are continuously hiring employees in the second quarter of 2023. We are putting efforts to decrease costs. To transform our non-billable corporate functions. Also, to streamline our strategic growth.”
Accenture said, “We’ve initiated actions. The announcement of laying off around 19,000 workers is a part of our strategy. It means we are terminating 2.5 percent of the company’s current employees. Moreover, half of the employees will be from our non-billable corporate functions.”
Why Is Accenture Laying Off Employees In 2023?
As we have read, the company is growing with positive revenue and record bookings. Then why is Accenture laying off a mass number of employees globally?
Let’s find out Why exactly Accenture is likely to eliminate approximately 2.5 percent of its workforce across the globe.
Accenture overhired employees last year. The company is estimated to have around 738,000 employees as of February 2023. In 2022, in the same period, it had about 699,000 employees. It is believed that after successfully laying off 19,000 workers even though Accenture will have more employees in 2023 than in 2022.
Accenture has taken over many companies last year. It indicates that the company has been filled with hundreds or even thousands of employees due to acquisitions. It noted that Accenture acquired around 25 more companies in 2022, including:
- Flutura (India-based AI company)
- Alfa (Barcelona-based tech company)
- Norcross, Trancom ITS (Japan-based IT company)
- Advocate Networks (Georgia-based tech company)
According to sources, Accenture continuously observes a decline in the rapid lift and shift move to the cloud. Overall, the company was not responsible for High Cloud Costs. Over the past few years, sales have been skyrocketing. But due to economic conditions, they failed to do the same this year. It is believed that the company will start hiring employees again. According to the company, once the economic conditions become better. It will begin hiring more employees.”
Accenture revealed that it had estimated around 1.2 billion US dollars in severance. Of which, 800 million US dollars is expected in fiscal year 2023. At the same time, about 700 million US dollars is expected in fiscal year 2024. However, the company reported a 5 percent growth in new bookings in the second quarter. So, paying out 1.2 billion US dollars to employees as severance packages seems financially safe.
In short, No industry is left unaffected by this layoff trend. So, Accenture wanted to join the bandwagon of the layoff trend this year.
Other Tech Giants Are Laying Off Employees
- Accenture is just one tech company that has announced a massive layoff this year. There are a lot of companies that have announced mass layoffs.
- KPMG, consulting giant, announced layoffs in February 2023. Due to a slowdown in demand, consulting superstar KPMG laid off about 2 percent of the US workforce.
- Massive IT services and consulting firm – McKinsey also laid off around 2,000 workers this year. According to reports, this was one of the company’s largest layoffs that have to be announced ever.
- Additionally, many largest tech companies have announced large layoff rounds this year. Companies like Dell, Microsoft, Google, and Amazon joined the category.
- Microsoft, a software and cloud giant, announced layoffs in 2023. It has laid off around 10,000 of its total workforce. The company has plans to conduct more layoffs ahead.
- The largest e-commerce giant, Amazon, laid off nearly 27,000 workers. Besides, it layoff more than 9,000 employees, including:
- Cloud computing market leader Amazon Web Services recently.
- Another search and cloud superstar, Google, laid off around 12,000 of its workforce globally.
- Dell Technologies – Server and storage market leader, laid off nearly 6.650 workers.
What Is Accenture Planning To Do In 2023?
According to reports, layoffs that happened in March affected many workers in non-billable corporate functions, including:
Financial departments, human resources, and legal departments. After mass layoffs, the company has plans to double its AI workforce.
It shows that the company will hire more employees in the future. Because the company decided to invest around 3 billion US dollars in its Data and AI practice in the next three years, it will help other companies develop new strategies to deploy to capitalize on the AI space.
Besides Accenture, many other major tech companies have plans to hire more employees. Companies like Meta, Google, Alphabet, etc., are. I am trying to put a firm foothold in strategic areas such as Artificial intelligence.
Conclusion
In conclusion, Accenture planned a mass layoff this year in March. After the mass layoffs, the company confirmed to double its workforce in the AI space to around 80,000. To do so, Accenture initiated to invest in the strategic areas. Other big tech companies also joined this layoff trend this year.