Barely a few days after we reported the Big Tech Layoff Tragedy, there’s news that at least 19,000 more jobs would be lost. However, the good part is that these jobs would go only over a period of 12 to 18 months as Accenture informed the stock exchanges that they need to let go staff in order to maintain profitability.
Data from a website that tracks layoffs in the United States indicated that in January 2023 alone, 84,714 people got laid off with the numbers for February (36,491) suggesting that the worst was possibly over. However, just the dust seemed to be settling, Amazon has announced another 9,000 jobs being lost.
The company is cutting its workforce by 2.5%
Coming to Accenture, the 19,000 jobs that it aims to cut accounts for 2.5% of its workforce with over half this number pertaining to individuals in the non-billable corporate functions. The company said in an SEC filing yesterday that its total workforce went up by 38,000 for the financial year ended February 2023 to serve the heightened demand for services and solutions.
The company wrote in the filing that “For the second quarter of fiscal 2023, attrition, excluding involuntary terminations, was 12%, down from 18% in the second quarter of fiscal 2022. We evaluate voluntary attrition, adjust levels of new hiring and use involuntary terminations as a means to keep our supply of skills and resources in balance with changes in client demand.”
Blame it on the global economic cues
The note said its operations had been impacted by the economic downturn, the inflationary environment and declining business confidence. “There continues to be a significant economic and geopolitical uncertainty in many markets around the world, which has impacted and may continue to impact our business, particularly with regard to wage inflation and volatility in foreign currency exchange rates. Therefore, annual revenue growth is expected to be between 8% to 10% for fiscal 2023 as against its previous estimates of between 8 and 11%.
“While we continue to hire, especially to support our strategic growth priorities, during the second quarter of fiscal 2023, we initiated actions to streamline our operations and transform our non-billable corporate functions to reduce costs. Over the next 18 months, these actions are expected to result in the departure of approximately 19,000 people (or 2.5% of our current workforce), and we expect over half of these departures will consist of people in our non-billable corporate functions,” Accenture said in the SEC filing.
However, business hasn’t been all that bad
The company said it was setting aside $1.2 billion for severance and $300 million for consolidation of office space. The filings by Accenture also noted that new bookings for the previous quarter stood at $22.1 billion with consulting accounting for $10.7 billion and managed services at $11.4 billion.
Accenture CEO and chair Julie Sweet told an earnings call that the company was also taking steps to lower costs in the fiscal year 2024 and beyond while continuing to invest in the business and people to capture significant growth opportunities ahead.
Nearly two-fifths of the company’s 7.4 lakh employees operated from India though it is yet unclear how the layoffs would impact jobs in the country. A report published in the ET quoted a company spokesperson to say that the people impact is estimated to be 2.5% of the total global workforce and may differ by market and by country as a consequence of the company’s varied footprint and growth and therefore isn’t a figure to be applicable in all geographies.
Accenture’s chief financial officer KC McClure told analysts during the earnings call that the actions taken from here on would impact 19,000 people of which over half are on non-billable corporate functions. Half of the total number of layoffs would be concluded by end-2023, the official said.