- Major consulting firms believe that demand for their services is sluggish.
- Consulting firm Accenture has revised down its sales growth forecast for 2024.
- Deloitte then embarked on a major reorganization to cut costs.
It's a tough time for consulting business.
Professional services company Accenture has lowered its 2024 revenue forecast, according to a quarterly report. The company previously expected sales to grow 2% to 5% this year, but now said it expects growth to be around 1% to 3%.
Accenture CEO Julie Sweet told analysts on a conference call that clients continue to make cuts.
“In January, I was able to understand my client’s budget. [into the new year] What we saw was further spending tightening. [by] According to the Financial Times, she said:
Accenture said in its quarterly report. Consulting revenue for the second fiscal quarter ended Feb. 29 was down about 3% compared to 2023, the company said.
Major consulting company Overall We are facing a decline in demand from our customers. The trend has been particularly damaging in recent years, as companies have been inundated with advice on how to survive the pandemic, and some have soared in the rankings. Currently, there are not enough jobs for new employees due to the difficult macroeconomic situation. Companies are now paying new employees benefits to start work months later than planned. For example, Accenture Proposed new graduate recruitment Up to $25,000 is required to delay the start date.
Depending on the consulting company, Surviving the downturn through organizational restructuring. Earlier this week, the FT reported that Deloitte had embarked on its biggest operational transformation in a decade.
As part of the restructuring, Deloitte's major business units will be split from five to four units. The FT said this would lead to cost savings for the company overall. Joe Ukuzoglu, Deloitte's global chief executive, said the reorganization would reduce the firm's “complexity” and “free up” more partners to work with clients instead of managing staff in-house. told the company's partners in an email.
“We recently completed a thoughtful process to modernize and simplify Deloitte’s storefront and go-to-market strategy, which will improve the exceptional quality and value we deliver to our clients and communities, and We are confident that this will further enhance the vibrant career paths we offer our employees,'' a Deloitte spokesperson told Business Insider in a statement.
Despite everything, messy eyes, one bright spot for consulting firms is the potential of AI. The need to understand new technologies and how to implement them seems to be driving the demand for new projects in several companies.
Accenture reports that new bookings for generated AI brought in more than $600 million in the most recent quarter and more than $1.1 billion through the first half of the fiscal year.
The Wall Street Journal said McKinsey is also making significant profits related to generative AI. report. Sven Smit, a senior partner at McKinsey, told WSJ that the challenge is how to leverage generative AI for both productivity and workforce restructuring.
