This action is part of a wider trend due to a marked cutback in IT spending and transformation. Reuters reporters that Cognizant has seen a lack of growth in IT deals, as well as IBM and Tata Consultancy services.

These cutbacks can be linked to Accenture’s annual revenue growth estimates, which are now between 8% and 10%, compared with its previous projection of a 8% to 11% increase.

In their filing with the Securities and Exchange commission (SEC), the company stated: “during the second quarter of fiscal 2023, we initiated actions to streamline our operations, transform our non-billable corporate functions and consolidate our office space to reduce costs.”

These moves will cost approximately $1.2 billion of employee severance and other personnel costs.

Over half of the cuts affect staff who work in corporate functions, and Accenture expects to incur $300 million of costs related to the consolidation of office space.

Accenture furthered that they expect to record “total business optimisation costs” of approximately $1.5 billion related to these actions, with approximately $800 million in fiscal 2023 and $700 million in fiscal 2024. The actual amount and timing of costs are dependent in part upon local country consultation processes and regulations.

Chief executive Julie Sweet characterised the cuts as “offensive” rather than defensive, to ensure Accenture kept to its long-term profitability targets in a high-inflation environment.

“We’ve been dealing with the challenges of compounding wage inflation,” she said. “We’ve been doing that with pricing, but we’ve also been doing that with cost efficiencies and digitisation and we’ve identified an opportunity to go after structural cost.”

This move comes after a number of similar moves in the sector, including Truelayer cutting 10% of their staff and BNPL platform Affirm announced it has cut 19% of its workforce.