Accenture plans to cut 19,000 jobs

Accenture said on Wednesday it will cut 19,000 jobs — about 2.5% of its workforce — over the next 18 months, one of the largest rounds of dismissals in a consultancy sector battling strong economic head winds.

The company said it expects to incur $1.2 billion in employee severance and other personnel costs and will spend an extra $300 million on office-space consolidation. The job cuts come after Accenture hired 39,000 people over the past year, according to a company filing.

The move is the latest sign of the economic uncertainty impacting consultancy, tech and finance firms. Last month, McKinsey said it plans to ax 2,000 jobs following a rapid expansion of head count over the past decade, while KPMG announced it had cut almost 700 professionals from its U.S. advisory practice amid slowing demand. Others, such as EY, are trimming their hiring targets by thousands.

“The pandemic created a lot of consulting opportunities that the firms couldn’t give up. Hence the hiring binge,” said Tom Rodenhauser, managing partner of Kennedy Research Reports, which tracks the consulting sector. “Now, we’re seeing a correction. We’ll probably see a few more firms doing the same in the coming months.”

Accenture’s announcement dwarfs the job cuts of its peers. Over half of the eliminations will affect people in nonbillable corporate functions, including human resources, financial and legal departments.

The reduction’s size reflects Accenture’s close ties to the reeling tech industry, says Rodenhauser. “Accenture has a dominant position in that sector as a provider, so it’s natural that the largest provider would feel the effects more as the sector slows.”

CEO Julie Sweet said the company is “taking steps to lower our costs in fiscal year 2024 and beyond, while continuing to invest in our business and our people.”