Accenture cuts jobs, trims forecasts on worries of lower IT spending
Accenture Plc lowered its annual income and revenue forecasts and stated on Thursday it might lower about 2.5% of its workforce, the most recent signal that the worsening world financial outlook was sapping company spending on IT providers.
More than half of the 19,000 jobs to be lower will likely be in its non-billable company capabilities, Accenture stated, sending its shares up greater than 4% earlier than the bell.
Since late final 12 months, the tech sector has laid off a whole bunch of hundreds workers resulting from a requirement downturn attributable to excessive inflation and rising rates of interest.
Rival Cognizant Technology Solutions final month pointed to “muted” development in bookings, or the offers IT providers corporations have within the pipeline, in 2022 and forecast quarterly income beneath expectations.
IBM Corp and India’s high IT providers agency Tata Consultancy Services have additionally flagged weak point in Europe, the place the Ukraine conflict has affected shopper spending.
Accenture now expects annual income development to be between 8% and 10%, in contrast with its earlier projection of a 8% to 11% improve. Earnings per share is predicted within the vary of US$10.84 to $11.06 in contrast with $11.20 to $11.52 beforehand.
“Companies remain focused on executing compressed transformations,” Chief Executive Julie Sweet stated in a post-earnings name referring to how companies had been attempting to develop into leaner within the turbulent economic system.
A survey of greater than 1,000 IT resolution makers by U.S.-based Enterprise Technology Research stated they plan to cut back their 2023 finances development. The development expectations are actually 3.4%, down from 5.6% improve captured in October 2022.
“Our forward-looking technology spending intentions data for both sectors (IT Consulting and Outsourced IT) are approaching zero!” stated Erik Bradley, chief engagement strategist on the know-how market analysis agency.
“In short, the data indicates a very difficult environment ahead for consulting firms.”
Reporting by Chavi Mehta in Bengaluru; Editing by Sriraj Kalluvila and Arun Koyyur
