Layoffs, acquisition pullbacks, slower growth: Accenture hints at grim picture for FY26

Accenture

Accenture plans to cut staff and exit certain acquisitions as it braces for slower growth in FY26, the company said on its earnings call.

"We are exiting, on a compressed timeline, people where re-skilling based on our experience, and is not a viable path for the skills we need,” CEO Julie Sweet said on September 25.

No specifics on headcount cuts were disclosed.

The exits come even as the firm continues to invest in generative AI and cloud services, areas that have been driving strong demand.

Nevertheless, for fiscal 2026, Accenture expects continued headcount growth across the US and Europe.

Moreover, the developments come amid slowing client demand, showing that even top-tier firms are trimming staff despite continued interest in AI and cloud projects.

Tata Consultancy Services (TCS), India’s largest IT services company, has also announced layoffs of over 12,000 employees on similar grounds, saying the reason is skills mismatch, among other factors.

Accenture’s workforce declined by about 11,000 employees in Q4FY25, bringing its total headcount to roughly 780,000.

"The business optimization program has two parts. One related to rapid talent rotation that Julie mentioned, which reflects severance associated with headcount reductions that we are making in a compressed timeline, and second, related to the divestiture of two acquisitions that are no longer aligned with our strategic priorities," CFO Angie Park added.

Meanwhile, Accenture's share price was down about two percent after the company posted its quarterly results.

Accenture flags low growth

Accenture's FY26 revenue growth will be below the prior guidance of 3-6 percent.

The world's largest IT company now expects full-year revenue growth of 2 percent to 5 percent in local currency. This is far below the 7 percent growth it achieved in the just-concluded fiscal.

To add to the woes, the figure excludes a 1 percent to 1.5 percent impact from its US federal business.

Accenture’s guidance also mirrors a wider trend in India’s IT sector.

After Donald Trump took over as the President of the US, he appointed entrepreneur Elon Musk to head a department: the Department of Government Efficiency (DOGE), for "modernising federal technology and software to maximise governmental efficiency and productivity".

The Nasdaq-listed IT services provider's growth slowed recently, hit by US federal procurement.

“The new administration has a clear goal to run the federal government more efficiently. During this process, many new procurement actions have slowed, which is negatively impacting our sales and revenue,” Sweet said during the company’s earnings call on March 20, 2025.

Analysts asked the management about the potential impact of the exits on client delivery and talent retention. To this, the company said it will continue reskilling programs and hiring in priority areas to maintain service quality.

Acquisition Pullbacks

Accenture also announced plans to exit certain non-core businesses and divest assets worth $865 million as part of its ongoing portfolio optimization strategy.

The move is aimed at reallocating resources toward higher-growth areas, particularly AI, digital services, and cloud-driven initiatives, enabling the company to streamline operations while strengthening its focus on emerging technologies.