Accenture may lay off thousands in India as it trims 5% of global workforce
26 Aug 2020
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Information Technology major Accenture is planning to reduce its global workforce by about 5 per cent, raising the prospect of thousands of job losses in India, the company’s largest base. The downsizing has been necessitated by falling business due to the coronavirus pandemic, the Australian Financial Review reported.
Accenture, which has a workforce of 5 lakh worldwide, employs nearly two lakh people in India and a downsizing of workforce means at least 10,000 of Accenture employees in India will lose jobs as and when the company implements its latest round of layoffs.
The move to downsize workforce is partly prompted by the sluggish business the Covid-19 pandemic has forced on the company.
The Australian Financial Review (AFR) first reported this, citing an internal staff meeting by Accenture CEO Julie Sweet in mid-August. The company is reportedly targeting the bottom 5 per cent of employees by performance measures, who will be transitioned out, the report pointed out.
"In a normal year, we transition about 5 percent and we hire to replace them because we are in a demand scenario. Right now, we are 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," the AFR report quoted Accenture CEO Julie Sweet as saying at an internal staff meeting earlier this month.
Accenture, however, explained that the company is not planning extraordinary global workforce actions. "Every year, as part of our performance process, we have conversations with our people about how they are performing, areas for improvement, their potential to progress, and whether they are a long term fit for Accenture," it said.
"This year, across all parts of our business and all career levels, we will identify approximately 5 per cent of our people as our lowest performers, and these individuals will transition out of Accenture. This is consistent with our actions each year," the company informed.
"This year, in addition to the normal 5 per cent, we've identified more people who need improvement ... So we're making sure ... if we have to make other actions, we know where our performance is," she was quoted as saying in an internal global staff meeting streamed online.
Accenture said that In India, "we continue to hire, and as part of our ongoing compensation programmes, we also recently recognised a number of our people with bonuses and promotions".
Sweet "faced questions from staff about changed internal performance assessments" in the global meeting.
"She said that despite cutting subcontractors and halting fresh recruitment, the company still needed to reduce numbers," the report said.
"We finished our second quarter at the end of February and we were growing 8 per cent. We were having an incredible year".
The growth had collapsed to 1.3 per cent owing to the pandemic. Accenture currently has 509,000 people serving clients in more than 120 countries.
