Consulting giant Accenture is planning to trim 5% of its 500,000 global workforce after the conclusion of the ongoing appraisal cycle. The company follows the September to August financial year and is facing weak demand in the wake of Covid-19.
The Dublin-headquartered company has 200,000 employees in India, its largest base in the world, and around 10,000 could be impacted. The report first appeared in the Australian Financial Review, which cited an internal staff meeting streamed online in mid-August.
The company’s CEO, Julie Sweet, had said that in a normal year Accenture annually transitions out 5% of its staff based on performance and hires an equal number as replacements. But this year, she implied there will be no replacements. The company will identify poor performers across all parts of the business and career levels.
Sweet said “chargeability,” or the amount of working hours its staff could attribute to paying clients, had dropped below 90% for the first time in a decade, and performance metrics were being used to target staff to “transition out” of the company. She added that despite removing subcontractors and halting fresh recruitment, the company still needs to reduce numbers.
The company maintained that it will continue to manage its business for the long term and ensure that it has the right people with the right skills to best serve its clients.
Sweet pointed out that during the quarter ended February the company enjoyed growth of 8%, but it collapsed in the following quarters due to the pandemic. In the third quarter Accenture’s revenue growth was 1.3% and the company has lowered its yearly forecast to 3-6% from the 6-8% it had stated previously.
Most IT services companies have been impacted by Covid-19 and taken various measures, including the reduction of their workforce, to stay afloat. Recently, Cognizant Technology Solutions, which employs 200,000 employees in India, reportedly laid off thousands on the bench who were not actively involved in any project. IBM has also reportedly laid off about 2,000 employees globally.