Accenture is cutting staff and exiting parts of its business as it braces for slower growth in fiscal 2026, signaling deepening strain across the global IT sector despite continued investment in AI and cloud.
CEO Julie Sweet said the firm is “exiting, on a compressed timeline, people where re-skilling is not a viable path for the skills we need,” during its September 25 earnings call. While she did not specify the number of layoffs, the company’s workforce shrank by about 7,000 in Q4FY25, bringing headcount down to approximately 770,000.
The retrenchments come amid moderating growth and reduced client demand, even as Accenture continues to prioritize generative AI and cloud services. “We continue to see pockets of strong AI-driven demand, [but] overall growth in our key markets is moderating,” Sweet said.
Accenture now projects FY26 revenue growth of just 2–5% in local currency, down sharply from the 7% recorded last year. The forecast excludes a 1% to 1.5% drag from its U.S. federal business, which has slowed under the new Department of Government Efficiency (DOGE), led by Elon Musk. The department’s aggressive overhaul of federal procurement has disrupted IT contracts, directly affecting Accenture’s public sector revenues.
CFO Angie Park added that the firm will focus on improving operational efficiency and backing high-return investments. To that end, Accenture plans to divest $865 million in non-core assets and exit underperforming acquisitions.
Despite layoffs, the company says it will continue hiring and reskilling in priority areas to support service delivery. Management said headcount is still expected to grow in the U.S. and Europe during FY26.
Accenture’s realignment reflects broader shifts in the IT services industry. Tata Consultancy Services (TCS), India’s largest IT firm, has already laid off more than 12,000 employees this year, citing skill mismatches amid declining demand.
The Nasdaq-listed firm’s shares fell about two percent following the earnings report, highlighting investor concern over the company’s lower growth outlook and strategic pullbacks.
