Romolo Tavani - stock.adobe.com
Outsourcing giant Accenture is cutting 900 jobs in the UK, as a result of the economic slowdown caused by the Covid-19 pandemic.
As a bellwether for the IT sector, Accenture’s announcement is a sign of the challenges facing the IT and business services sectors.
According to a report in The Guardian, an internal message to staff blamed the current economic crisis.
The company, which has about 11,000 staff in the UK, said: “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.”
Businesses across the world are fighting for their very existence, with business levels in some sectors flatlining.
As global businesses’ volumes collapse amid lockdowns, including in the UK, large multinationals are putting major projects on hold. For example, according to outsourcing advisory ISG spending on business process outsourcing (BPO) by EMEA businesses in the first quarter of this year dropped off 51% from the previous quarter. The IT services sector also saw declines, although less steep.
As a result, large services providers are experiencing severe slowdowns in business. Accenture said it is still confident in its UK business for the long-term, but it added: “We are taking steps now to be able to continue investing in our workforce and our business, ensuring we have the right people with the right skills to best serve our clients, and are well positioned for the future.”
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When the current pandemic is over, businesses will start to invest in their operations, with an acceleration of digital transformation to support new operating models and boost resilience in the post-crisis world topping the priority list.
For suppliers that emerge from the crisis with satisfied customers, they will be the chosen partners to help rebuild, which will inevitably lead to significant IT investments. The company has notified its UK staff and will go into collective employee consultation for a proposed redundancy programme.