Accenture on Thursday lowered its annual profit and revenue forecasts to announce it would cut about 2.5% of its workforce, i.e.19,000 jobs. This is the most recent indication that corporate spending on IT services is being slashed as a result of the deteriorating global economic outlook.
The company announced the layoffs, sending its shares up more than 4% before the bell, and stated that more than half would affect employees at its non-billable corporate activities.
As opposed to its previous prediction of an increase of 8% to 11%, Accenture now anticipates yearly revenue growth to be between 8% and 10%.
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As its first-quarter revenue prediction came in below market expectations last month, rival Cognizant Technology Solutions predicted “muted” growth in bookings—the transactions that IT services companies have in the works—in 2022.
Instead of the previous range of $11.20 to $11.52, Accenture said it now anticipates earnings per share to be in the range of $10.84 to $11.06.
In a post-earnings call, Chief Executive Julie Sweet said, “Companies remain focused on executing compressed transformations,” referring to how companies are attempting to become leaner in the unstable economy.