Layoff Watch ’23: Accenture is ‘Streamlining Operations’ But Don’t Worry, It’s Mostly Back Office Staff

It’s a rare day we write about Accenture but because the firms we do write about have begun tightening their belts and even cutting advisory people (KPMG, BDO), we thought it prudent to inform you of what appeared in the 10-Q the company filed yesterday. This is from Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations:

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.

And:

During the three and six months ended February 28, 2023, we recorded $244 million in business optimization costs, primarily for employee severance. As part of these business optimization initiatives, we expect to record total costs of approximately $1.5 billion, with approximately $800 million in fiscal 2023 and $700 million in fiscal 2024. The $1.5 billion is expected to consist of $1.2 billion of employee severance and other personnel costs and $300 million related to the consolidation of office space. The actual amount and timing of costs are dependent in part upon local country consultation processes and regulations and may differ from our current expectations and estimates.

Accenture reported revenue of $15.8 billion, a 5% increase (in USD).

There’s also a fun section in the quarterly report called “People Metrics” that flexes a utilization rate of 91%:

Utilization for the second quarter of fiscal 2023 was 91%, compared to 92% in the second quarter of fiscal 2022. We hire to meet current and projected future demand. We proactively plan and manage the size and composition of our workforce and take actions as needed to address changes in the anticipated demand for our services and solutions, given that compensation costs are the most significant portion of our operating expenses. Our workforce, the majority of which serves our clients, increased to approximately 738,000 as of February 28, 2023, compared to approximately 699,000 as of February 28, 2022. The year-over-year increase in our workforce reflects demand for our services and solutions, as well as people added in connection with acquisitions.

You can find Accenture’s March 23 10-Q and 8-K on their site here.

Photo by Maksym Kozlenko