London (StorifyNews) – Accenture, has recently announced its plans to cut 19,000 jobs globally. The Irish-American professional services company plans to spend $1.2 billion in severance pay to cut 2.5% of its workforce over the next 18 months. Additionally, it will spend another $300 million to consolidate office space. Accenture mentioned that more than half of the eliminated jobs would be among back-office staff. Despite the reduction in its workforce, Accenture says it will continue to hire but has taken steps to streamline its operations and transform its non-billable corporate functions to reduce costs.
The consulting firm, which has 738,000 employees worldwide, downgraded its revenue growth outlook for the 2023 fiscal year to between 8% and 10%, from its previous estimate of between 8% and 11%. Following its announcement, shares in Accenture rose 3.9% to hit $263 apiece in early trade. However, the New York-listed stock is down by more than 5% over the past 12 months.
Accenture’s rivals are also trying to cut costs, with consulting giant KPMG announcing last month that it would cut almost 2% of its US workforce as it anticipated waning client demand. McKinsey could also slash as many as 2,000 non-consulting staff in one of its biggest round of layoffs ever, Bloomberg reported last month, citing unnamed sources close to the matter.
The tech industry is also experiencing job cuts, with thousands of workers laid off in recent months due to higher interest rates, inflation, and recession fears that have led to a pullback in advertising and consumer spending. Last week, Facebook-parent Meta announced its plan to lay off another 10,000 workers, its second round of significant job cuts in four months. Together, these cuts will reduce Meta’s headcount by about 25%.
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