Accenture Cuts 11,000 Jobs, CEO Explains Reason Behind Layoffs

Accenture Cuts 11,000 Jobs, CEO Explains Reason Behind Layoffs

A massive Artificial Intelligence (AI)-focused restructuring programme is underway at Accenture, with the company laying off at least 11,000 employees in the last three months.

The IT giant has decided to part ways with the workforce it can’t retrain with AI skills, but also plans to hire more people over the next year or so, according to a report in Business Insider.

The “number 1 strategy”, according to CEO Julie Sweet, is “upskilling”. But “we are exiting on a compressed timeline and people where reskilling, based on our experience, is not a viable path for the skills we need.”

It also plans to help upskill staff on AI systems. “Every new wave of technology has a time where you have to train and retool. Accenture’s core competency is to do that at scale,” she said.

In the last six months, Accenture has generated $2.6 billion in revenue for its AI consulting work. The restructuring plan appears to have its roots in AI’s growth potential for the company.

The Power of Portraiture: Humanizing Deportation Through Art

Its latest measure is likely to cost the company around $865 million in severance packages, Tech.co reported. Accenture’s workforce, post the layoffs, has shrunk from 791,000 to 779,000 between May and August this year, the report added.

Layoffs, however, aren’t the only measure of the bigger plan. Angie Park, the chief financial officer, said that apart from “rapid talent rotation,” Accenture will also divest two acquisitions.

“These actions will result in cost savings which will be reinvested in our people and our business,” Park said.

Accenture views AI as “expansionary” and not “deflationary”, Sweet said, adding it’s part of everything we do. The IT giant is the latest company to plan things around AI.

For instance, Microsoft has laid off people, but the company has also onboarded new people, keeping the headcount unchanged.

Similarly, Mark Zuckerberg’s META let go of about 5 per cent of its workforce earlier this year, but soon went on an AI hiring spree and filled many of the positions with upskilled people.

(Except for the headline, this story has not been edited by VoM News staff and is published from the syndicated feed)