Accenture cut its 2024 revenue forecast as demand for consulting services slows. Davide Bonaldo/SOPA Images/LightRocket via Getty Images
Size Consulting company are experiencing lower demand for their services.
Consulting firm Accenture has lowered its revenue growth forecast for 2024.
Deloitte has embarked on a massive restructuring to cut costs.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
Times are tough for Consulting company like Deloitte and Accenture.
The consulting firm Accenture has its sales forecast for 2024 its quarterly report lowered. The company had previously assumed sales growth of between 2 and 5 percent this year. Today only 1 to 3 percent is expected.
Accenture Chief Executive Officer Julie Sweet told analysts on a conference call that customers would make further cuts.
“We gain insight into our customers’ budgets in January. As we the sheet [zum Jahreswechsel] As we turned around, we saw our customers continue to limit their spending and that is impacting our services,” she said laut Financial Times.
Accenture said in its quarterly report that consulting revenue fell about 3 percent in its fiscal second quarter ended Feb. 29 compared to 2023.
Dwindling demand
Large consulting companies are faced with dwindling demand from their customers. This trend is particularly harsh because some firms have swelled their ranks in recent years as businesses flocked to them for advice on dealing with the pandemic. Now, given difficult macroeconomic conditions, there is not enough work for these new employees. Companies are now offering stipends to new employees so they can start work months later than planned. Accenture, for example, offered new hires after graduation up to 25,000 dollars (equivalent to 23,000 euros) to postpone their start date.
Some consulting firms are surviving the downturn by restructuring. Earlier this week reported the FT said Deloitte has embarked on “the biggest restructuring” of its operations in a decade.
As part of the restructuring, Deloitte’s key business areas will be divided into four units instead of the previous five. This will help reduce costs across the business, according to the FT. Joe Ucuzoglu, Deloitte’s global chief executive, told the firm’s partners via email that the reorganization would curb the company’s “complexity” and free up more partners to work with clients rather than manage internal staff.
“We recently completed a thoughtful process to modernize and simplify Deloitte’s storefront and go-to-market strategy. We are confident this will further enhance the exceptional quality and value we provide to our clients and communities, as well as the dynamic career paths we offer our employees,” a Deloitte spokesperson said in a statement to Business Insider.
AI as a beacon of hope
Despite all of that gloom A ray of hope for consulting firms is the promise of AI. The need to understand and implement the new technology appears to be driving demand for new projects among several companies.
Accenture reported that new generative AI bookings brought in over $600 million (equivalent to €550 million) in the most recent quarter and $1.1 billion (equivalent to €1 billion) in the first half of the fiscal year.
McKinsey also reports significant revenue in connection with generative AI, like the Wall Street Journal reported. McKinsey senior partner Sven Smit told the Journal that there is demand for how to use generative AI for both productivity and workforce transformation.
Read the original article Business Insider