Accenture to lay off employees unable to reskill in AI
What's the story
Accenture, a leading IT consulting firm, has announced that it will be letting go of employees who are unable to reskill in artificial intelligence (AI). The decision comes as part of a larger restructuring plan and follows the company's global workforce reduction of over 11,000 employees in the last three months. Accenture's CEO Julie Sweet said they are "exiting on a compressed timeline people where reskilling...is not a viable path for the skills we need."
Strategic shift
The $865 million restructuring plan
On Thursday, Accenture announced an $865 million restructuring plan and provided a forward-looking statement. The company cited weak demand for consulting services from corporate clients and reduced spending by the US federal government as reasons for the move. Despite these challenges, Accenture remains committed to growing its operating profit margins by at least 10 basis points annually in the next fiscal year.
Growth indicators
Generative AI projects and employee upskilling
Accenture's generative AI projects brought in $5.1 billion in new bookings over the past year, up from $3 billion last year. The company also revealed that 77,000 of its employees are now trained in AI or data skills—an impressive jump from just 40,000 two years ago. Sweet emphasized their commitment to upskilling employees as a key strategy for the company's growth.
Workforce changes
Layoffs to continue until November
As of August 31, Accenture employed 779,000 people, down from 791,000 three months earlier. The company has already started a round of layoffs that will continue until November. Sweet clarified that these exits are not related to utilization but are strategic decisions based on skills mismatch. The restructuring plan also includes severance payments and selected divestitures as part of its "business optimization program."