Accenture trims forecasts, will cut 19,000 jobs

Accenture trims forecasts, will cut 19,000 jobs

Corporate tech spend falling.

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Accenture lowered its annual revenue and profit forecasts and decided to cut about 2.5 percent of its workforce, or 19,000 jobs, the latest sign that the worsening global economic outlook was sapping corporate spending on IT services.

More than half of the jobs to be cut will be in its non-billable corporate functions, Accenture said, sending its shares up 6.4 percent.

Since late last year, the tech sector has laid off hundreds of thousands of employees due to a demand downturn caused by high inflation and rising interest rates.

Rival Cognizant Technology Solutions last month pointed to "muted" growth in bookings, or the deals IT services firms have in the pipeline, in 2022 and forecast quarterly revenue below expectations.

IBM and India's top IT services firm Tata Consultancy Services have also flagged weakness in Europe, where the Ukraine war has affected client spending.

Accenture now expects annual revenue growth to be between eight percent and 10 percent, compared with its previous projection of an eight percent to 11 percent increase.

The company expects to incur US$1.2 billion (S$1.6 billion) in severance costs through fiscal 2023 and 2024.

"Companies remain focused on executing compressed transformations," CEO Julie Sweet said in a post-earnings call, referring to how businesses were trying to become leaner in the turbulent economy.

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