Accenture extends voluntary sabbaticals to Asia

Consulting firm Accenture has announced that it is laying off 1500 workers, or 2 per cent of its global workforce, and extending its voluntary sabbatical program to Asia and Europe.

Accenture spokeswoman Roxanne Taylor said 1000 consultant jobs and 500 support positions will be eliminated by the end of the month. The company has a global workforce of more than 75,000.

Local company spokesman Simon Bush confirmed on Monday that all jobs in the Australian organisation would remain safe. However, under the global "FlexLeave" program, around 173 local graduate-level analysts who have typically been with the firm for two years or less before becoming consultants, will take leave of six to 12 months "purely voluntarily", and are guaranteed a position with the company on their return, Bush told Computerworld.

Accenture, like other IT consulting firms, is suffering from a slowdown in demand for its services. The company also said the layoffs were necessary because Accenture was suffering from the lowest attrition rate in years.

"With voluntary attrition rates in the low single digits in some parts of the world and temporary excess capacity due to a shift in our business mix from shorter-term consulting projects to a greater focus on longer-term business transformation outsourcing, we are taking these actions after our normal annual budget review and management plan to ensure that our staffing levels are better balanced with client demand," said Joe Forehand, Accenture's chairman and CEO, in a statement.

Bush said he was reticent to comment on operational savings the company expects to achieve by extending the program to Asia and Europe. "I'm not in a position to comment on [cost savings] or any recent changes in our business mix," he said.

In June, the New York-based company cut 600 internal support jobs and offered sabbaticals to 1000 consultants, primarily in the US.

Taylor said the sabbatical program was so successful that the company is expanding it to workers in Europe and Asia. The sabbaticals will last from six to 12 months and are being offered to consulting workers who have been with Accenture for at least one year. Employees who take a sabbatical will continue to get 20 per cent of their salaries, plus all corporate benefits.

Commenting on the company's extension of voluntary sabbaticals, a local Gartner analyst said cost-cutting moves of this sort have been commonplace among Silicon Valley companies like Hewlett Packard and Sun Microsystems since the last recession, in the late 80s and early 90s.

"This kind of management strategy is cross-industry now. It has become a standard cost-cutting tactic," he said.

"Companies like HP and Sun have tended to offer employees the option of not doing anything, taking a voluntary pay cut or taking accrued holidays. Companies quickly found that in organisations with a good culture, a large proportion of employees chose to take holidays or pay cuts for the good of the company."

Accenture, which became a publicly traded company in the US on July 19, raised $US167 billion in its initial public offering. It had revenue of $5.71 billion during the first half of its current fiscal year.

The company said it wouldn't take a restructuring charge and is comfortable with analysts' consensus estimates of earnings of 10 cents per share for the fourth quarter of fiscal 2001, ending August 31, and 85 cents per share for fiscal 2002.

Accenture also said its board of directors has voted to authorise the repurchase of up to $US150 million worth of shares of its common stock from time to time in the open market.

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