Accenture Plc on Thursday lowered its annual revenue and profit forecasts and said it would cut about 2.5% of 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 layoffs will affect staff at its non-billable corporate functions, the company said, sending its shares up more than 4% before the bell.
Also read: Amazon to cut 9000 more jobs in fresh layoff round: Report
Accenture now expects annual revenue growth to be between 8% and 10% compared to the previous projection of 8% to 11% increase.
Last month, rival Cognizant Technology Solutions pointed to "muted" growth in bookings, or the deals IT services firms have in the pipeline, in 2022 after its first-quarter revenue forecast came in below market expectations.
Accenture said it now expects earnings per share to be in the range of $10.84 to $11.06 compared to $11.20 to $11.52 previously.
"Companies remain focused on executing compressed transformations," Chief Executive Julie Sweet said in a post-earnings call referring to how businesses were trying to become leaner in the turbulent economy.
{{/usCountry}}"Companies remain focused on executing compressed transformations," Chief Executive Julie Sweet said in a post-earnings call referring to how businesses were trying to become leaner in the turbulent economy.
{{/usCountry}}A survey of more than 1,000 IT decision makers by U.S.-based Enterprise Technology Research said they plan to reduce their 2023 budget growth. The growth expectations are now 3.4%, down from 5.6% increase captured in October 2022.
"Our forward-looking technology spending intentions data for both sectors (IT Consulting and Outsourced IT) are approaching zero!" said Erik Bradley, chief engagement strategist at the technology market research firm.
"In short, the data indicates a very difficult environment ahead for consulting firms."