Accenture to cut 19,000 jobs in a huge escalation of downsizing by consulting firms amid the economic turmoil

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. It also lowered its forecasts, with revenue expected to grow between 8% and 10% this fiscal year, down from a previous range of 8% to 11%.

It’s the latest sign of the economic uncertainty affecting consultancy, tech and finance firms that has led firms to lay off staff and introduce hiring freezes. Last month, McKinsey & Co. said it plans to axe 2,000 jobs following a rapid expansion of headcount over the past decade, while KPMG announced it had cut almost 700 professionals from its US advisory practice amid slowing demand. Others, such as EY, are trimming their hiring targets by thousands.

Accenture’s announcement dwarfs those moves. Over half of the job cuts will affect people in non-billable corporate functions including human resources, financial and legal departments.

The move comes comes just 16 months after Accenture pledged to create 3,000 tech jobs in the UK, including half outside of London, over three years. A spokesman for the company said this commitment still stands.

Chief Executive Officer 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.”

The shares climbed as much as 8.4% in New York following the announcement. The company also said bookings rose to a record $22.1 billion in its second quarter, beating estimates, a 13% increase from the same period last year. Over half of total new bookings came from managed services, with consulting making up the rest. Revenues also rose 5% to $15.8 billion.

The above-consensus bookings were “a surprise given the weak economic climate,” Bloomberg Intelligence analysts said in a report.