Accenture recently announced that the majority of staff promotions will be postponed by six months, with promotions now set for June rather than December. This decision stems from ongoing economic challenges within the professional-services sector. A company representative mentioned that June provides better visibility into clients’ demand and planning. This change, announced through an internal blog post, was first communicated to managing directors earlier this month.
Economic Uncertainty and Sector Slowdown
Accenture’s decision to delay promotions mirrors the wider industry trend of consultancy firms navigating reduced client spending. The company, which employs around 750,000 people globally, has faced significant challenges, including a revenue forecast downgrade in March 2024. Projected growth was reduced from 5% to a maximum of 3%, resulting in a steep stock drop. Like many competitors, Accenture rapidly expanded its workforce during the pandemic but now faces cutbacks.
Consulting Industry Facing Workforce Reductions
The consultancy sector at large is facing workforce reductions as the post-pandemic boom in demand wanes. Accenture is reducing its workforce by 19,000 jobs over 18 months. Similar headcount reductions are also seen in major consulting firms like McKinsey, Ernst & Young, and PricewaterhouseCoopers. Despite these cuts, a surge in demand for AI and automation projects offers some positive relief for the sector.
Salary Freezes in India and Sri Lanka
In October 2023, Accenture further emphasized the challenging economic environment by freezing salary hikes for employees in India and Sri Lanka, except in legally required or critical skill areas. With over 300,000 employees in India, this decision underscores the economic pressures on the company, as it looks to navigate its way through an uncertain global market.
