Managed services News
Accenture CEO Julie Sweet On Layoffs, Belt-Tightening, And Going After ‘Structural Costs’
Joseph F. Kovar
Addressing a company optimization push that includes the layoffs of 19,000 employees, or 2.5 percent of the workforce, as well as real estate tightening, Accenture CEO Julie Sweet told Wall Street analysts the systems integration behemoth is going on a cost-cutting ‘offensive’ to get ahead of ‘structural issues that have been created over the last couple of years.’
Growing Demand For Larger Transformational Deals
Accenture during the second quarter reported record bookings of $22.1 billion, including 35 clients with quarterly booking greater than $100 million, showing there is continued strong demand for the larger transformational deals and the need to build the digital core, Sweet said.
“And I’m personally working right now with clients across insurance, health care, consumer goods, banking and telecom, all of whom are very focused on how do we get rid of our technical debt, how do we build more resilience,” she said. “They’re trying to build digital products, but they’ve got really old systems.”
This is a big opportunity for a company like Accenture going forward, Sweet said.
“We remain in the early innings of building the kind of digital core that you really need to transform every part of the enterprise,” she said. “And so, we continue to feel good, not just about our pipeline, but about the demand we’re seeing really routed in our view that all companies are going to have to do total enterprise reinvention across the enterprise that it’s really a continuous cycle starting with a strong digital core. And there’s a lot of work to do on building those cores out.”
In general, while Accenture is seeing a trend toward larger deals, it’s seeing less of the smaller deals in S&C (strategy and consulting) and to some extent SI (systems integration), particularly in North America, Sweet said.
“If you think about it, what have we been trying to drive for the last few years?” she said. “We want to be at the center of our clients’ business. We want to be able to be relevant, really help them transform, and then be well positioned to continue to be that partner.”