On Thursday, Accenture Plc revised its annual revenue and profit forecasts downwards and announced its plan to reduce its workforce by 2.5%, or 19,000 jobs, reflecting the weakening global economic outlook and decreased corporate spending on IT services.

The company stated that over half of the job, cuts will affect staff in non-billable corporate functions. This news caused Accenture’s shares to rise over 4% before the bell. The company’s new projection for annual revenue growth is between 8% and 10%, compared to its previous estimate of an 8% to 11% increase. 

“During the second quarter of fiscal 2023, Accenture initiated actions to streamline operations, transform non-billable corporate functions and consolidate office space to reduce costs,” the company said.

Bleak Earnings

Meanwhile, Accenture’s earnings per share are now forecasted to range between $10.84 and $11.06, as opposed to the previous projection of $11.20 to $11.52. Earlier last month, Accenture’s rival, Cognizant Technology Solutions, had also reported “muted” growth in bookings, suggesting that the IT services sector may face challenging times ahead.

“Accenture expects revenues for the third quarter of fiscal 2023 to be in the range of $16.1 billion to $16.7 billion, an increase of 3 percent to 7 percent in local currency, reflecting the company’s assumption of an approximately negative 3.5 percent foreign-exchange impact compared with the third quarter of fiscal 2022,” the company said in a statement. 

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