Accenture CEO Julie Candy stated that the tightened US federal spending is weighing on its income. In the course of the firm’s fiscal second-quarter earnings name, Candy stated “As you understand, the brand new administration is targeted on operating the federal government extra effectively, which has slowed many procurement actions, negatively impacting our gross sales and income”. She additional revealed that the corporate’s Federal Companies enterprise has misplaced contracts with the US authorities after current evaluations.
“Federal represented roughly 8% of our world income and 16% of our Americas income in FY 2024”, she said in the course of the earnings name. “Whereas we proceed to consider our work for federal shoppers is mission-critical, we anticipate ongoing uncertainty as the federal government’s priorities evolve and these assessments unfold,” Candy stated.
Accenture shares fall by 7.3%
Following the corporate’s announcement, Accenture’s shares declined by roughly 7.3%, making it one of many first US company giants to really feel the affect of the Trump administration’s Division of Authorities Effectivity, DOGE. Established throughout President Donald Trump’s second time period and led by tech billionaire Elon Musk, DOGE has initiated vital federal job cuts as a part of its mission to streamline authorities operations and scale back public expenditure. It’s a cost-cutting initiative, geared toward downsizing federal businesses and consolidating workplace areas.
Candy said that Accenture’s Federal Companies division was additionally impacted by new steerage from the US Normal Companies Administration, which directed federal businesses to evaluate contracts with the ten highest-paid consulting corporations and terminate these deemed non-essential to their missions.
“We’re seeing an elevated degree of what was already a major uncertainty within the world financial and geopolitical atmosphere, marking a shift from our first quarter FY 2025 earnings report in December,” the CEO added. “On the similar time, we consider the basics of our trade stay robust.”
