Consulting and outsourcing services provider Accenture has announced plans to cut approximately 7% of its senior executive positions and reduce excess office space globally, as part of its strategy to drive future growth and profitability.
The company said that as a result of these initiatives, it will incur a pre-tax restructuring charge of approximately $247m in the fourth quarter 2009. Approximately $119m of the charge is related to the reduction of excess office space globally, while the remaining charges are related to severance and related costs. The company expects space reductions to be completed by year-end, and workforce reductions to be completed during the first quarter 2010.
For the fourth quarter 2009, Accenture expects revenue between $5 billion and $5.2 billion. It also expects the restructuring charge to reduce EPS for both the fourth quarter and fiscal 2009 by $0.24.
William D. Green, chairman and chief executive at Accenture, said: "We're taking proactive steps to ensure that we have the right cost structure to support our business going forward and that our organization is properly aligned to most effectively capture future growth opportunities. At the same time, we're making strategic investments in high-value growth areas that will enable us to extend our leadership in the market."
Earlier this month the company announced a management reshuffle involving 10 executives to focus on high demand areas including healthcare, analytics, digital services, mobility, and emerging technologies. In June, it reported a 5% decline in net income to $444m for the third quarter 2009, on revenue down 16% at $5.15 billion.