“These actions are expected to impact roughly 2.5 per cent, or 19,000, of our current workforce, of which over half are non-billable corporate functions, and include over 800 of our more than 10,000 leaders across our markets and services,” KC McClure, Accenture’s chief financial officer said during the company’s second quarter earnings call overnight. “Nearly half of the 19,000 people will depart by the end of fiscal-year ’23.”
In January, IBM announced 3900 job losses from its global operation and the company’s Australian branch has axed dozens of senior leaders in its consulting arm. KPMG Australia has cut about 2 per cent of its 10,000-strong staff, while McKinsey is also planning to cut 2000 jobs globally, or more than 4 per cent of its 45,000-strong workforce.
A senior source said the majority of cuts in the firm’s Australian and New Zealand operation will come from back-office workers as opposed to client-facing advisers. This source stated that the local operation was growing.
“Locally, it will be non-billable with very limited impact on client facing, as we have focused on performance achievement,” the source said. “We are still growing locally [in Australia and New Zealand] as well and hiring in high-demand areas.”
The job losses, if replicated locally, would lead to roughly 160 positions being cut from Accenture’s roughly 6500-strong Australia and New Zealand operation.
At the global level, Accenture now expects annual revenue growth to be between 8 per cent and 10 per cent, compared to the previous projection of an 8 per cent to 11 per cent increase.
The firm has almost 740,000 staff internationally, making it one of the world’s biggest publicly listed employers. The firm provides consulting and outsourcing services to blue-chip corporate clients around the world.
“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,” the firm said in a corporate filing to accompany the earnings announcement on Thursday.
The staff cuts would happen over “the next 18 months” the company said. The company has set aside $US1.5 billion ($2.2 billion) in charges associated with the cost-cutting, including “$US1.2 billion of employee severance and other personnel costs” and another “$US300 million of costs related to the consolidation of office space”.
McKinsey confirmed payments were offered to but declined to comment otherwise. A new McKinsey business analyst is typically paid about $130,000 a year.