Accenture Sees Decline in New Bookings Amid Global Uncertainty
Global consulting leader Accenture has experienced a downturn in new project engagements, with bookings dropping 6% to approximately $19.7 billion in the quarter ending May 31. Although the company surpassed earnings expectations, the weaker-than-anticipated growth pushed its share price down nearly 8% during early Wall Street trading. CEO Julie Sweet attributed the slowdown to escalating geopolitical tensions and economic instability, noting that uncertainty is higher now compared to 2024.
Clients Reassess Spending, Focus on Digital Transformation
Across industries, clients are not facing a single issue but a host of challenges including economic volatility and shifting customer behaviors. This multifaceted uncertainty has led to a hesitance around smaller, non-essential consulting deals. However, investments in large-scale digital transformation projects continue to hold priority, as companies concentrate on initiatives that promise significant impact.
Sweet explained that clients are far from inactive; rather, they are selectively investing in projects that are expected to deliver long-term benefits.
Impact of U.S. Federal Budget Cuts
Accenture’s portfolio, which includes partnerships with the U.S. federal government and contributes around 8% to its global revenue, has also been adversely affected. Recent cost-cutting measures and a tightening federal budget have resulted in the cancellation or renegotiation of several contracts. Since January, 28 federal deals—including four major umbrella agreements nearing $1 billion in total—have been terminated for convenience.
For the quarter ending in May, federal spending on Accenture’s services dropped to $643 million, a figure that is just over half of the previous year’s spending during the same period.
Two Quarters of Slowed Bookings and Workforce Adjustments
Analysts have observed a consistent deceleration in booking growth, prompting concerns about the firm’s future trajectory. In response, Accenture has initiated a strategic reorganization aimed at reducing overhead costs. The company’s global workforce was reduced slightly during the quarter, dropping from 801,000 to 791,000, partly due to a series of voluntary exits. This reduction follows earlier announcements to cut 19,000 jobs over an 18‐month period.
Leadership Changes and Organizational Restructuring
In a bid to streamline decision-making and foster cost efficiency, Accenture is undergoing significant leadership reshuffling. Three senior executives, including the heads of its Consulting and Technology divisions, have stepped down. The responsibilities of all five business units will be consolidated under Manish Sharma, who previously oversaw operations in the Americas.
Onboarding Delays Hit New Graduates
As part of its cost-containment measures, Accenture has also slowed its hiring process. Several new graduates expecting to begin their roles in recent months have seen their start dates postponed. A spokesperson explained that these delays are being implemented to better align with evolving business needs and client demands. Some candidates have already declined offers rather than face an extended wait, and the company is attempting to mitigate the impact by offering additional signing bonuses.
Growing Frustration Among Current and Prospective Employees
The uncertainty within Accenture has sparked growing discontent on social media platforms where past and potential employees are sharing their experiences. Comments from college seniors and former interns reveal disappointment over prolonged delays and missed opportunities, a sentiment that reflects broader industry challenges. The current situation is in stark contrast to the rapid hiring sprees observed during the pandemic by not only Accenture but also other major consulting firms. Many now find themselves overstaffed while facing a slowdown in new project initiatives.
As the consulting industry adjusts to these headwinds, the coming months will show whether Accenture and its peers can rebound or if the era of cautious spending and structural consolidation will continue.
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