Why Accenture Is Laying Off 19,000 Employees: 5 Things To Know
‘Over the next 18 months, these actions are expected to result in the departure of approximately 19,000 people (or 2.5 percent of our current workforce), and we expect over half of these departures will consist of people in our non-billable corporate functions,’ Accenture said.
Accenture ‘Did Not Account For’ High Cloud Costs
CRN spoke with two solution provider executives regarding Accenture’s layoffs.
One top sales leader from an SP 500 company said he sees the layoffs as a sign that Accenture is seeing a slowdown in the “rapid lift and shift” move to the cloud that came in the wake of the COVID-19 pandemic.
“Accenture over-rotated with the move to the cloud and did not account for the higher costs that Fortune 500 companies see when they moved to the cloud without anticipating the technical debt that comes with moving mission critical applications to the cloud,” said the executive, who did not want to be identified.
Cloud costs are one of the biggest issues in the technology market today. In fact, a recent study by Flexera showed that cloud costs are the No. 1 challenge to businesses today.
Flexera said 2023 marks the first time in a decade that managing cloud spend has overtaken security as the top challenge facing organizations across the board. For example, Flexera respondents reported that public cloud spending was over budget by an average of 18 percent.
Another top sales executive for an SP 500 solution provider, who did not want to be identified, said he was not surprised by the Accenture layoffs given the buying spree by the systems integrator.
“Big companies like Accenture always over-rotate when they are pursuing a growing market like cloud,” the executive said. “Their sales go up for several years, but they fail to anticipate economic factors that could slow growth down. Three years from now they will be rehiring people, when the economy is good again.”