Global IT consultancy Accenture has begun laying off 5% of its staff, with the company sending notes to its employees, saying that it has an “overcapacity of people relative to demand.”
Accenture has more than 500,000 employees around the world, with nearly half of them working out of India. Between 10,000 and 20,000 employees are set to lose their jobs in India alone.
In an email statement issued to Indian newswire PTI, the IT consultant has confirmed the layoffs, but described its move as “normal process”, adding that every year it fires some of its employees after assessing their performance.
Many Accenture employees in the UK are also on their way out. British daily The Guardian has published a note the company sent to its employees, in which Accenture has blamed the economic crisis for the layoff.
“We went into the crisis with an overcapacity of people relative to demand. The crisis has caused additional strain on the business due to lower demand and reduced national attrition. In addition, we have identified structural costs that we need to address.”
It is true that Accenture removes some employees every year but quickly refills those vacant positions with new hires. But it is not going to add any more people to its payroll this year.
“Right now, we’re not in a demand scenario, so if we manage out the same percentage of people and don’t replace them it allows us to continue to invest and preserve some people who have lower chargeability for when the market comes back” stated the company’s CEO Julie Sweet in an internal meeting, according to Australian Financial Review.
Accenture’s revenue decreased by less than 1% in the third quarter that ended May 31, and it has acquired more than a dozen companies in the first half of this year.
Meanwhile, labor unions in the Indian city of Bangalore are accusing Accenture of forcing employees to resign, arguing that the IT consultant is violating labor laws by laying off employees without permission from the local government.