Accenture (NYSE:ACN), dealing with macroeconomic challenges and performance setbacks, has announced that it will withhold salary increases for its workforce in India and Sri Lanka for the fiscal year 2023. Ajay Vij, the managing director, communicated this decision on Thursday.
In addition to the salary freeze, the annual performance bonuses will also be reduced. This action is a response to Accenture's grappling with an uncertain demand environment. In another cost-cutting measure, the company has deferred senior management promotions until June 2024.
Accenture, with a market cap of $192.83 billion, as per InvestingPro data, is a prominent player in the IT Services industry. The company, known for its high earnings quality, with free cash flow exceeding net income, is also recognized for consistently increasing its earnings per share, as noted by InvestingPro Tips.
Despite the current cost-cutting measures, Accenture plans to continue promotions up to Level 5 of employees in December, albeit at a slower rate than last year. This decision aligns with the company's sales growth guidance of 2-5% for fiscal year 2024.
The financial performance of the company has been under pressure recently. Accenture reported a year-on-year drop in net income of 16% for the quarter ended August 2023. The company's workforce in India and Sri Lanka exceeds 300,000 employees.
Yet, Accenture still yields a high return on invested capital and operates with a high return on assets, as per InvestingPro Tips. It has also managed to maintain dividend payments for 19 consecutive years, which is an important factor for investors.
Accenture's P/E Ratio stands at 27.99, and the company is trading at a high Price / Book multiple of 7.66, indicating a high valuation relative to its book value. The company's revenue for the last twelve months (LTM2023.Q4) was $64111.75 million, with a growth rate of 4.09%.
Investors interested in more insights can explore additional tips and real-time metrics on Accenture from InvestingPro, which provides a comprehensive analysis of various companies and sectors.
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