IT services and consulting major Accenture has announced it will lay off 19,000 people, or 2.5 percent of its headcount, on account of wage inflation and cost streamlining, a report by Business Standard informed. As per the report, the IT firm expects a severance cost of $1.2 billion.
Accenture joins the list of companies that have announced layoffs. They are technology-product firms such as Meta, Google, Microsoft, and Amazon, noted BS.
"Of the 19,000, over half are from non-billable functions with more than 800 of its 10,000 leaders across services and markets. Nearly half the 19,000 people will depart from the company by the end of the financial year," said the management during the earnings call.
However, BS pointed out that the immediate impact of its India business could not be ascertained. India is one of the largest talent bases of the company. In 2022, the company said it had 300,000 people in India, about 40 percent of the total workforce, highlighted the market daily.
“We’re going after structural costs ... we have been dealing with a difficult situation of compounding wage inflation, and also with pricing,” said Julie Sweet, chair and chief executive officer, Accenture.
The report further stated that the company in a regulatory filing had said that while it continued to hire to support its strategic growth priorities, during the second quarter of fiscal 2023, it had initiated action to streamline operations and transform its non-billable corporate functions to reduce costs.
More importantly, the company also stated the hiring outlook for the next quarter would be muted, it added.