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IT services and consultancy firm Accenture said it would lay off 19,000 staffers, or 2.5% of its workforce,  over the next 18 months to reduce costs amid uncertain macroeconomic conditions.

“While we continue to hire, especially to support our strategic growth priorities, during the second quarter of fiscal 2023, we initiated actions to streamline our operations and transform our non-billable corporate functions to reduce costs,” the company said in an Securities & Exchange Commission (SEC) filing on Thursday.

“Over the next 18 months, these actions are expected to result in the departure of approximately 19,000 people (or 2.5% of our current workforce), and we expect over half of these departures will consist of people in our non-billable corporate functions,” the company added.

The job cuts reflect stabilizing demand, following explosive post-pandemic growth, and prudent cost management, according to Ignacio Rasero, vice president for Moody’s Investors Service.

In addition, the company has revised its fiscal year 2023 revenue growth.

“Accenture expects revenues for the third quarter of fiscal 2023 to be in the range of $16.1 billion to $16.7 billion, an increase of 3% to 7% in local currency, reflecting the company’s assumption of an approximately negative 3.5% foreign-exchange impact compared with the third quarter of fiscal 2022,” the company said in a statement.

Despite the reduced forecast, Accenture’s diversified business and industry mix can help offset weakness in specific sectors, such as technology, and provide stability, Rasero said, adding that long-term demand prospects for Accenture’s services remain high as the company continues to benefit from digital transformation trends.

Accenture’s decision to cut jobs comes just after Amazon decided to fire another 9,000 more workers from several business units, including AWS, at the beginning of the week.

Earlier this month, Meta announced that it would fire 10,000 employees, over and above the 11,000 job cuts that it announced four months ago. 

Uncertain macroeconomic conditions have forced technology companies to announce massive layoffs since 2022 through 2023.

IT Consulting Services, Technology Industry

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Accenture on Tuesday said that it was acquiring Flutura, an internet of things (IoT) and data science services firm, for an undisclosed sum to boost the industrial AI services that it sells under the umbrella of Applied Intelligence.

The acquisition assumes significance as the Asia-Pacific region constitutes 70% of Accenture’s Applied Intelligence market, according to Gartner. EMEA, North America and Latin America account for 15%, 10% and 5% of the softwares sales, respectively.

“Flutura’s acquisition will power industrial AI-led transformation for our clients globally and particularly in Australia, South-East Asia, Japan, Africa, India, Latin America and the Middle East,” Senthil Ramani, senior managing director at Accenture, said in a press note.

Accenture also leads the industrial AI services market followed by Deloitte, according to a Gartner analysis conducted in 2022. The market research firm, which clubs these services as data and analytics (D&A) services, expects its market to reach $232 billion globally by the end of 2024.

As part of its Applied Intelligence services, Accenture offers data-led transformation services along with AI-based solutions that it brands as Solutions.AI. Other services include consulting and ensuring deployment of responsible AI solutions.

Accenture plans to bring Flutura’s capabilities to clients in the energy, chemicals, metals, mining, and pharmaceutical industries, the companies said in a joint statement.

“Flutura democratizes AI for engineers, enabling manufacturing and other asset-intensive companies with the carbon intelligence to reduce emissions, energy consumption and lost output due to unplanned downtime of industrial assets, said Ramani.

Flutura’s capabilities includes AI platform Cerebra that supports self-service analytics from disparate IT systems or data sources, solutions for process, asset management and energy efficiency.

Flutura also offers connected assets, connected processes, Vision Intelligence, Engineer’s Workbench as its core product offerings.

Bengaluru-based Flutura, which was incorporated in 2012, was founded by Derick Jose, Krishnan Raman, and Srikanth Muralidhara. The company, which has raised $8.5 million in investment, was part of Microsoft Accelerator in Bengaluru. Its lead investors include HPE Digital Catalyst program, Vertex Ventures, Hitachi High-Technologies and Lumis Partners.

Artificial Intelligence, Internet of Things, IoT Platforms

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Accenture on Wednesday said that it was acquiring US-based supply chain management (SCM) software provider Inspirage for an undisclosed amount to expand its Oracle-focused business.

Inspirage will move its 710 employees to the Accenture Oracle Business Group in order to bolster its supply chain management skills and expand its ability to help product-centric clients create interconnected, intelligent and innovative supply chain networks, the companies said in a joint statement.

The Accenture Oracle Business Group helps enterprises implement Oracle technologies such as the Oracle Autonomous Cloud, the human capital management (HCM) suite, the customer experience (CX) suite, and its ERP cloud.  

Currently, Inspirage serves clients in high-growth microverticals within the high-tech, life sciences, manufacturing, consumer goods, retail, and oil and gas industries.

Accenture on an acquisition spree

Accenture, which has been an Oracle partner for more than 30 years, has been on an acquisition spree to expand its Oracle business over the last few years.

In May 2018, Accenture completed the acquisition of UK-based Certus solutions to boost its capabilities to help enterprises move to Oracle cloud, specifically in the health and public sectors. In October 2018, it acquired DAZ systems along with its 300 employees to bolster its Oracle Cloud ERP services business.

In 2021, Accenture acquired Canadian Oracle Cloud Partner, Cloudworks—a startup with 100 employees—to focus on delivering Oracle systems to its customers.

Last week, the company acquired US-based MacGregor Partners. MacGregor is a supply chain consultancy and technology provider specializing in intelligent logistics and warehouse management, and is expected to expand Accenture’s supply chain network and fulfillment transformation capabilities, which is powered by Blue Yonder technology, the company said in a statement.

Supply chain issues dominate industry sectors

The supply chain software market has been gaining importance and momentum as challenges around the pandemic and geopolitical tensions have disrupted logistics for most industry sectors.

In a survey conducted by Forrester Consulting on behalf of KPMG after the pandemic hit in 2020, about 80% of respondents claimed that making operations and supply chain processes more responsive to change was their biggest digital transformation priority.  

A report from electronic components and semiconductor distributor, Avnet Silica, showed that issues around supply chain, often driven by semiconductor shortages, remain the top concern for most industry sectors despite talk of the pandemic slowing down.

The report, which is based on a study conducted by Avnet consultants after reviewing 30,111 earnings call across different sectors between January 2018 and April 2022, points out that supply chain issues occupied more than 60% of airtime in earnings calls across all industries in 2022, compared to just 47% and 37% in 2021 and 2020, respectively.

All these factors combined have resulted in interest from cloud software providers to digitize supply chain operations for enterprises. A report from Allied Market Research showed that the global digital supply chain market is expected to reach $13.67 billion by 2030 from $3.91 billion in 2020.

Oracle continues push for Fusion applications

Meanwhile, Accenture’s acquisition of Inspirage to bolster its Oracle business comes at a time when Oracle is continuing to invest in expanding its cloud services to play catch up with rivals such as Google Cloud, Amazon Web Services (AWS), and Microsoft.

Oracle’s Fusion Cloud applications and NetSuite sales have been growing at a steady pace, with CEO Safra Catz saying that these two cloud products accounted for major part of the growth in the last few quarters.

In the fourth quarter that ended in June 2022, Fusion ERP Cloud revenue was up 23% in constant currency terms, with NetSuite ERP cloud revenue showing an increase of 30% in constant currency terms.

In the previous quarter, the products showed an increase in revenue of 35% and 29% (in constant currency) respectively.

Mergers and Acquisitions, Supply Chain Management Software, Technology Industry