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Accenture to cut 19,000 jobs, slashes forecasts as earnings impress

Published 2023-03-23, 10:10 a/m
Updated 2023-03-23, 10:15 a/m
© Reuters Accenture to cut 19,000 jobs, slashes forecasts as earnings impress

© Reuters Accenture to cut 19,000 jobs, slashes forecasts as earnings impress

Proactive Investors - Accenture (NYSE:ACN) plans to cut 19,000 jobs or about 2.5% of its workforce and has lowered its annual revenue and profit forecasts, becoming yet another tech firm to trim costs amid challenging economic conditions.

The Dublin-based IT services and consultancy company revealed in an SEC filing on Thursday that it plans to carry out the job cuts over the next 18 months, with half of the departures expected to be people in its non-billable corporate functions.

In a statement accompanying the release of its second quarter fiscal 2023 results, Accenture (NYSE:ACN) also said it was reducing its revenue growth expectation for fiscal 2023 to a range of 8% to 10%, compared to 8% to 11% previously.

It now expects GAAP diluted earnings per share (EPS) to be in the range of $10.84 to $11.06, compared to $11.20 to $11.52 previously, and adjusted EPS to be in the range of $11.41 to $11.63, an increase of 7% to 9% over fiscal 2022 diluted EPS of $10.71.

Earnings beat sends stock higher

Despite the downward revision in its forecasts, the company’s stock moved higher on its strong quarterly results, which beat expectations on the top and bottom lines.

Accenture posted adjusted EPS of $2.69 on revenue of $15.8bln. Wall Street analysts had been expecting adjusted EPS of $2.49 on revenue of $15.6bln.

Analysts at Wedbush noted that Accenture’s 2Q fiscal 2023 results had exceeded the Street’s expectations, pointing to a record pipeline and strong bookings.

However, they pointed out: "The company lowered its FY23's C/C revenue growth outlook (from 8-11% to 8-10%), which is now more back-end loaded, with no impact on projected EPS.”

Accenture’s Frankfurt-listed shares had added 4.1% at €242.50 on Thursday afternoon, while its US-listed shares were up 3.9% at US$263.08 shortly after the market opened in New York.

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