Accenture not immune to challenging economic times

Peter Dinham
Sunday, 29 March 2009 10:22

IT Industry - Deals

A report just released on the IT industry says that IT services firm, Accenture, is showing that it is not immune to the challenging economic environment, with the company reporting a top line decline of 6% in US currency , but up 3% in local currency, for its fiscal second quarter of 2009.
 

According to a report on Accenture by Technology Business Research (TBR) Accenture’s results highlight the struggles that most IT services companies are going through with decelerating economic growth, clients’ slashed IT budgets, a strengthening U.S. dollar and unstable global markets.
 
“Given the market conditions, Accenture continues to be very cautious about the rest of the year, revising the guidance down to 0%-4% in local currency.  At the same time, Accenture’s cost containment is certainly notable, allowing the company to post improvements to its bottom-line in the recent quarter.”

TBR says that Accenture’s painstaking approach to managing risk and cost containment is well known and “it comes in handy in this economic environment.”

 TBR analysts say they also believe Accenture has  decreased hiring, cancelled some expansion plans while layoffs have been taking place over the last three months, with a redundancy program in the Manila facilities affecting about 500 employees, or 3% of its 16,000 people in the Philippines.

The report by TRB says there was also a deferred plan by Accenture to add 200,000 square feet space in Chennai, India, and there is a chance there will be fairly large layoffs in the US in March and April.

According to TBR, “cost containment” and “fueling growth” will be key themes for Accenture in the next six to 12 months.
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