Accenture to Cut 19,000 Jobs as IT Spending Slows

The company said it expects its business-optimization plan to cost about $1.5 billion, mostly from employee severance during the remainder of the current fiscal year and fiscal 2024.

Accenture employs about 738,000 people globally and added 28,000 people in the two previous quarters, Chief Financial Officer

KC McClure

said in a call with analysts Thursday. The company wouldn’t comment on the cuts beyond what it provided in a Securities and Exchange Commission 10-Q filing.

Chief Executive

Julie Sweet

said the consulting firm had “identified an opportunity to go after more structural costs.” Accenture has also been dealing with the challenge of “compounding wage inflation” through pricing, cost efficiencies and digitizing, she said.

Layoffs at the IT consulting company contribute to a wave of job cuts in recent months as companies across technology, manufacturing and other sectors look to cut costs amid uncertainty about rising interest rates, persistent inflation and other economic challenges.

Until recently, roles in IT had mostly been protected from the sweeping layoffs at major technology companies like

Amazon.com Inc.,

Alphabet Inc. and

Meta Platforms Inc.

The job market for information-technology professionals shrank in January for the first time in more than two years, a sign that IT staffers are facing the same scrutiny as workers in other positions and sectors as companies slow spending. 

Notably, many of the IT positions being cut or automated are those in data-center operations and telecommunications, said

Victor Janulaitis,

the chief executive of consulting firm Janco Associates Inc., while a large skills gap remains in areas like cybersecurity and software development.

“What we are seeing is still a big demand for IT skills,” said Ray Wang, founder and principal analyst at IT consulting firm Constellation Research Inc. “While Accenture is managing to its shareholders, there are a large number of firms with 20% to 30% attrition that are happy to pick up folks from Accenture.”

Cognizant Technology Solutions Corp.

, also an IT consulting and outsourcing services provider, reported a slowdown in growth in its quarterly earnings in February. While revenue in its communications, media and technology group grew by 9%, Cognizant Chief Financial Officer

Jan Siegmund

said in an earnings call that growth among its largest clients has slowed, and that it is monitoring changes in the tech sector.

McKinsey & Co. last month said it could shed as many as 2,000 jobs from its 45,000-person staff. 

Accenture’s layoffs come as worldwide IT spending is projected to total $4.5 trillion in 2023, an increase of 2.4% from last year, but less than half the rate of the previous estimate by research and IT consulting firm

Gartner Inc.

in October. Consulting firms like Accenture are often used by large companies for major IT upgrade projects, said Tim Crawford, CIO strategic adviser at Los Angeles-based enterprise IT advisory firm AVOA.

“As demand from enterprise customers declines, so will Accenture’s staffing needs,” Mr. Crawford said. “This does create a bellwether that overall large projects are being scaled back, which we had already seen starting some six months ago or so.”

Facing continued economic uncertainty, corporate technology leaders have sought creative ways to work with leaner budgets than in previous years.

Capital One Financial Corp. in January laid off about 1,100 employees in the “agile” group within its technology department, which had focused on a software development methodology that uses more rapid and flexible processes. 

Accenture is also consolidating some of its office space, Ms. McClure said Thursday on the analyst call. 

The news from Accenture came after the company on Thursday reported $15.8 billion in quarterly revenue, a 5% increase from the same period last year. 

The company also downgraded its revenue growth outlook for the year to between 8% and 10%, from a previous estimate of between 8% and 11%. Ms. Sweet noted on Thursday’s call that the company has seen growth in its communications, media and technology group in Europe, especially as compared to the slowdown among its North American clients.

Write to Belle Lin at [email protected] and Will Feuer at [email protected]

The company said it expects its business-optimization plan to cost about $1.5 billion, mostly from employee severance during the remainder of the current fiscal year and fiscal 2024.

Accenture employs about 738,000 people globally and added 28,000 people in the two previous quarters, Chief Financial Officer

KC McClure

said in a call with analysts Thursday. The company wouldn’t comment on the cuts beyond what it provided in a Securities and Exchange Commission 10-Q filing.

Chief Executive

Julie Sweet

said the consulting firm had “identified an opportunity to go after more structural costs.” Accenture has also been dealing with the challenge of “compounding wage inflation” through pricing, cost efficiencies and digitizing, she said.

Layoffs at the IT consulting company contribute to a wave of job cuts in recent months as companies across technology, manufacturing and other sectors look to cut costs amid uncertainty about rising interest rates, persistent inflation and other economic challenges.

Until recently, roles in IT had mostly been protected from the sweeping layoffs at major technology companies like

Amazon.com Inc.,

Alphabet Inc. and

Meta Platforms Inc.

The job market for information-technology professionals shrank in January for the first time in more than two years, a sign that IT staffers are facing the same scrutiny as workers in other positions and sectors as companies slow spending. 

Notably, many of the IT positions being cut or automated are those in data-center operations and telecommunications, said

Victor Janulaitis,

the chief executive of consulting firm Janco Associates Inc., while a large skills gap remains in areas like cybersecurity and software development.

“What we are seeing is still a big demand for IT skills,” said Ray Wang, founder and principal analyst at IT consulting firm Constellation Research Inc. “While Accenture is managing to its shareholders, there are a large number of firms with 20% to 30% attrition that are happy to pick up folks from Accenture.”

Cognizant Technology Solutions Corp.

, also an IT consulting and outsourcing services provider, reported a slowdown in growth in its quarterly earnings in February. While revenue in its communications, media and technology group grew by 9%, Cognizant Chief Financial Officer

Jan Siegmund

said in an earnings call that growth among its largest clients has slowed, and that it is monitoring changes in the tech sector.

McKinsey & Co. last month said it could shed as many as 2,000 jobs from its 45,000-person staff. 

Accenture’s layoffs come as worldwide IT spending is projected to total $4.5 trillion in 2023, an increase of 2.4% from last year, but less than half the rate of the previous estimate by research and IT consulting firm

Gartner Inc.

in October. Consulting firms like Accenture are often used by large companies for major IT upgrade projects, said Tim Crawford, CIO strategic adviser at Los Angeles-based enterprise IT advisory firm AVOA.

“As demand from enterprise customers declines, so will Accenture’s staffing needs,” Mr. Crawford said. “This does create a bellwether that overall large projects are being scaled back, which we had already seen starting some six months ago or so.”

Facing continued economic uncertainty, corporate technology leaders have sought creative ways to work with leaner budgets than in previous years.

Capital One Financial Corp. in January laid off about 1,100 employees in the “agile” group within its technology department, which had focused on a software development methodology that uses more rapid and flexible processes. 

Accenture is also consolidating some of its office space, Ms. McClure said Thursday on the analyst call. 

The news from Accenture came after the company on Thursday reported $15.8 billion in quarterly revenue, a 5% increase from the same period last year. 

The company also downgraded its revenue growth outlook for the year to between 8% and 10%, from a previous estimate of between 8% and 11%. Ms. Sweet noted on Thursday’s call that the company has seen growth in its communications, media and technology group in Europe, especially as compared to the slowdown among its North American clients.

Write to Belle Lin at [email protected] and Will Feuer at [email protected]