In an effort to reduce costs amid a bleak economic outlook, Accenture plans to eliminate 19,000 jobs globally.
In a statement that sent its shares up more than 4% before the bell, the company said that more than half of the layoffs will affect employees at non-billable corporate functions.
Rather than expecting an increase of 8 to 11%, Accenture now projects annual revenue growth to range between 8 and 10%.
After its first-quarter revenue forecast came in below market expectations last month, rival Cognizant Technology Solutions predicted "muted" growth in bookings — the deals that IT services companies have in the works — in 2022.
Accenture said it now expects earnings per share to be in the range of $10.84 to $11.06, compared to the $11.20 to $11.52 previously anticipated.
"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.
More than a thousand IT decision-makers were polled in the U.S. According to Enterprise Technology Research, they intend to curtail budget growth by 2023. As opposed to the 5.6% increase recorded in October 2022, the current growth expectations are 3.4%.
"Our forward-looking technology spending intentions [for] data for both sectors (IT Consulting and Outsourced IT) are approaching zero!" noted Erik Bradley, chief engagement strategist at the technology market research firm.
"In short, the data indicates a very difficult environment ahead for consulting firms."
