Accenture has announced plans to cut 19,000 jobs over the next 18 months and has lowered its revenue guidance for the upper end of the 2023 fiscal year. The move is a reflection of the growing stress in the IT services sector as clients shift their focus to cost optimization and reduce their spending. While Accenture expects its revenue to increase by 8-10% year-on-year in FY23, it has revised down its upper guidance from 11%. The company's Q2 results showed revenue of $15.81 billion, beating its own guidance, and new bookings reaching a record high of $22.1 billion, up 36.4% sequentially.
Over half of the 19,000 job cuts will be in non-billable corporate functions, according to Accenture. The company expects to incur $1.2 billion in severance and personnel costs, with $500 million in FY23 and $700 million in FY24. The move is part of the $1.5 billion business optimization costs Accenture will incur in FY23 and FY24.
Accenture CEO Julie Sweet said the company is facing unprecedented wage inflation and addressing it through improved pricing and cost efficiencies. The company is also targeting structural costs to increase resilience in the P&L.
Accenture's net headcount addition has remained flat quarter-on-quarter at 738,000, with annualized voluntary attrition down to 12% from 13% in the same period. Sweet expects net headcount addition to trend similarly in Q3, with possible additions in Q4. Accenture's results are being watched closely ahead of Indian IT companies reporting their Q4 numbers.