New York August 20, 2001 Management and technology consulting firm Accenture will cut its staff by 1,500, or about 2 percent, in a bid to reduce costs in the face of a continuing slowdown in the global economy.
The firm said in a statement issued Friday that the cuts would affect about 1,000 consulting personnel, principally in the United States, and about 500 support positions worldwide, mostly through job eliminations as a result of restructuring certain functions.
Other consulting firms that have announced layoffs recently include Accenture rivals PricewaterhouseCoopers, KPMG Consulting and Deloitte & Touche.
Like its competitors, Accenture, which employs about 75,000 people worldwide, has been hit, among other things, by a drop in corporate spending for e-commerce integration projects. The firm also said that its attrition rate has dropped to the lowest level in years.
The Accenture announcements come just a month after the consulting firm launched its initial public offering, which raised $1.67 billion for the company.
In a statement about the layoffs, Joe Forehand, Accenture's chairman and CEO, said, "With voluntary attrition rates in the low single digits in some parts of the world and temporary excess capacity due to a shift in our business mix from shorter-term consulting projects to a greater focus on longer-term business transformation outsourcing, we are taking these actions after our normal annual budget review and management plan to ensure that our staffing levels are better balanced with client demand."
The company says it is planning to extend its FlexLeave sabbatical program to its consultants in Europe and Asia. Under the program, participating consultants receive 20 percent of their salaries and continuation of their employer-provided benefits during their sabbaticals. The duration of the sabbaticals, available to consulting personnel at the senior-manager level and below, range from six to 12 months.
The consulting firm reported revenues before reimbursements of $9.75 billion for the fiscal year ended August 31, 2000, and $8.67 billion for the nine months ended May 31, 2001.
The company said that while it would expense the majority of the costs associated with these actions on its income statement in the fourth quarter ending August 31, 2001, and would not take a restructuring charge.
Accenture also announced that its board of directors has voted to authorize the repurchase of up to $150 million worth of shares of its common stock from time to time in the open market. The timing and amount of any such repurchases will be at the discretion of the company and will be based on market conditions and other factors.