News of a delay in a significant activity has caused concern among investors.
Accenture’s (ACN -4.82%) primary announcement on Tuesday was less than favorable, leading to a more than 4% decline in the company’s stock on the day. The renowned consulting firm announced a delay in its annual round of promotions, a decision that might affect hundreds, if not thousands, of employees.
According to Bloomberg, which reported the news before market opening, Accenture plans to postpone most of its scheduled promotions by six months. Citing unnamed sources familiar with the situation, the article indicated that the promotions will be announced next June instead of the usual December timeline.
A representative, who requested anonymity, confirmed the change, stating that the timing shift is permanent. This representative explained that June offers “better visibility of our clients’ planning and demand.”
Sources from Bloomberg disclosed that Accenture’s managing directors were informed of the change earlier in September. Currently, the company employs approximately 750,000 individuals and operates in 120 countries.
The consultancy sector is currently facing challenges due to a reduction in spending by many enterprises. While economic fears have slightly diminished, they still persist, with top executives concerned about ongoing inflation and international conflicts potentially impacting the global economy. In times of uncertainty, companies typically cut back on spending, often starting with non-essential services like consultancy.
As a result, Accenture has revised its revenue guidance for the current fiscal year, now anticipating a maximum revenue growth of 3% compared to the previous year, down from an earlier forecast of 5%.
Eric Volkman holds no positions in any of the mentioned stocks. The Motley Fool has positions in and recommends Accenture Plc. The Motley Fool also recommends long January 2025 $290 calls on Accenture Plc and short January 2025 $310 calls on Accenture Plc. Further details can be found in The Motley Fool’s disclosure policy.
