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Accenture Plans Layoffs in Austin

attends WIRED25 Work: Inside San Francisco’s Most Innovative Workplaces on October 12, 2018 in San Francisco, California.

According to the Texas Workforce CommissionAccenture has plans to lay off 549 employees in June. The layoffs will affect workers at a facility in The Domain, which is leased by Meta, the parent company of Facebook, according to the Austin Business Journal. The Ireland-based professional services group often works with Facebook on content moderation, according to the Austin Business Journal.

Accenture currently employs around 5,900 people in Austin, according to the Austin Chamber of Commerce.

Accenture Cuts 549 Jobs in Austin

In a statement, Accenture said, "From time to time, we adjust our workforce on ongoing projects to meet the needs of our clients. We are fully committed to supporting our people through this transition."

Accenture has a significant presence in Texas, with offices in Austin, Dallas, Houston and San Antonio. The company has contracts with large technology giants, including Google and Facebook parent-company Meta, but some of these contracts ended in recent months as the technology industry goes into cost-cutting mode.

The layoff numbers were reported in a WARN letter, which stands for Worker Adjustment and Retraining Notification Act. The WARN Act requires employers to provide notice to state governments in the event of major layoffs.

In this case, the WARN notice redacted the affected positions in Austin but indicated the cuts will affect a range of positions. The WARN notice said employees' last days would be between June 27 and September 8, 2023.

"This action is due to a change in client contract requirements and is expected to be permanent," the notice said, but added that "We will rescind an employee’s termination if, during the notice period, they are able to obtain a new role within Accenture and we will support their efforts to search for a new role."

The Austin layoffs follow a wider announcement Accenture made in March in an SEC filing that said the company would be cutting 19,000 employees globally, or about 2.5% of its workforce, over the next 18 months.

In March, the Dublin, Ireland-based firm said it would spend $1.2 billion in severance to cut 2.5% of its workforce over the next 18 months and another $300 million to consolidate its office space. More than half of the eliminated roles would be among back-office staff, the company said.

What Accenture Said in its Quarterly Report

Accenture has 738,000 employees globally, and said in its latest quarterly report to the U.S. Securities and Exchange Commission that it continues to hire but had “initiated actions to streamline operations and transform our non-billable corporate functions to reduce costs,” CNN reported. The $167 billion company also downgraded its revenue growth outlook for the 2023 fiscal year to between 8% and 10% from its previous estimate of between 8% and 11%, CNN said.

The company had increased its workforce by 38,000 in the financial year that ended February 2023 to serve the increased demand for its services and solutions, it said.

“For the second quarter of fiscal 2023, attrition, excluding involuntary terminations, was 12%, down from 18% in the second quarter of fiscal 2022. We evaluate voluntary attrition, adjust levels of new hiring and use involuntary terminations as a means to keep our supply of skills and resources in balance with changes in client demand,” Accenture wrote in the filing.

“Our results of operations are affected by economic conditions, including macroeconomic conditions, the overall inflationary environment and levels of business confidence. There continues to be significant economic and geopolitical uncertainty in many markets around the world, which has impacted and may continue to impact our business, particularly with regard to wage inflation and volatility in foreign currency exchange rates. In some cases, these conditions have slowed the pace and level of client spending,” the firm said.

What is Accenture’s Competition Doing?

Accenture’s rivals are also trying to trim their costs. According to the Financial Times, an internal memo from consulting giant KPMG announced last month that it would cut almost 2% of its U.S. workforce as it anticipated waning client demand.

McKinsey could also slash as many as 2,000 non-consulting staff in one of its biggest rounds of layoffs ever, Bloomberg reported last month, citing unnamed sources.

Of course, it’s not just consulting tightening the belt. Thousands of workers in the tech industry have been laid off in recent months as higher interest rates, inflation and recession fears have led to a pullback in advertising and consumer spending. In the MSP space, Atlassian, HP and Zscaler have also slashed headcount in recent months.