Accenture’s Axing 19,000 Jobs

Accenture’s Axing 19,000 Jobs

8 months ago2 mins

Consulting behemoth Accenture is wielding the headcount ax this time around, chopping 19,000 jobs according to news out on Thursday.

What does this mean?

Accenture makes its money by offering brains-for-hire to firms planning major system revamps. Over time it's evolved into a top-tier adviser for cutting-edge tech endeavors, like helping firms transition to the cloud – and that means this round of layoffs is well worth watching. See, while Accenture's only trimming 19,000 employees from its colossal 738,000-strong workforce, this move marks a stark reversal of its recent direction: the firm’s filled out its ranks by an extra 50% over the past two years, driven by fierce competition to conquer the cloud. So whether this decision suggests a slowdown in demand or simply a pruning of underperformers, there’s bound to be something behind this sharp about-face.

Accenture stock
Source: Google Finance

Why should I care?

Zooming out: On cloud four and a half.

As first-quarter results loom, tech investors have been pondering one super-important topic: just how bad the cloud slowdown will be for giants like Microsoft, Amazon, and Alphabet. Remember, those players fessed up to seeing, ahem, clouds gathering when they reported their fourth-quarter earnings – but the economic outlook has improved in recent months, and AI’s burst onto the scene making all kinds of grand promises. That’s lifted Big Tech titans’ share prices, which has investors hoping that the cloud doesn’t rain on their first-quarter parade.

The bigger picture: Along for the ride.

Investors have been casting around for ways to hitch their portfolio to the AI train ever since ChatGPT’s grand debut – and there's no shortage of prospects out there. IT services companies and consulting firms like Accenture could be one way to catch a ride: they’ve tended to thrive during past big tech shifts, and a bunch of companies could well look at AI, scratch their heads, and turn to the experts for help.

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