Accenture to Cut 19,000 Jobs After Lowering Guidance. Stock Rises.

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Accenture

on Thursday reported earnings and revenue that beat consensus expectations, but lowered its full-year guidance and said it plans to cut around 19,000 jobs.

The company, which offers IT consulting and other services, said in a regulatory filing that it would cut about 2.5% of its workforce. It said more than half the departures would come in nonbillable corporate roles, and it continues to hire to support its strategic growth.

“We are…taking steps to lower our costs in fiscal year 2024 and beyond while continuing to invest in our business and our people to capture the significant growth opportunities ahead,” CEO Julie Sweet said in a statement.

Accenture

(ticker: ACN) reported adjusted earnings per share of $2.69 for its second fiscal quarter ended in February. Revenue came to $15.81 billion, up 9% from the same period the prior year in local currencies.  

Accenture was expected to report quarterly earnings of $2.49 a share on revenue of $15.59 billion, according to a FactSet poll of analyst estimates. 

The company said quarterly new bookings of $22.1 billion set a record and were up 17% in local currency from the previous year. 

Accenture shares rose 3.5% in premarket trading. Shares are down 23% in the last 12 months, against a 12% decline in the

S&P 500

index over the same span.

Accenture said it now expects full-year revenue growth of 8% to 10% in local currency, compared with 8% to 11% previously. It projects full-year earnings per share between $10.84 and $11.06, compared with a previous forecast of $11.20 to $11.52 a share.

A potential downgrade to revenue growth expectations had been anticipated. J.P. Morgan analysts wrote in a research note ahead of the earnings report that Accenture was potentially facing clients delaying new projects. Accenture stock suffered in December after warning of a slowdown in spending by clients.

While guidance for revenue and earnings came down, Accenture raised its expectations for full-year free cash flow to a range of between $8.0 billion and $8.5 billion, from $7.7 billion to $8.2 billion previously. It continues to expect to return at least $7.1 billion in cash to shareholders through dividends and share repurchases.

Write to Adam Clark at [email protected]