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Accenture Forecast Miss Signals Weak IT Spending

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Accenture forecast third-quarter revenue below Wall Street expectations, reflecting continued caution among clients on large-scale IT spending.

The company expects revenue between $18.35 billion and $19.00 billion, with the midpoint slightly under analyst estimates. The outlook highlights ongoing hesitation among businesses to commit to major transformation projects amid economic uncertainty.

Enterprises are increasingly delaying or scaling back large IT investments, prioritizing cost control over expansion. This trend is affecting consulting and technology service providers that rely on long-term digital transformation contracts.

The forecast underscores broader weakness in corporate tech spending despite ongoing interest in emerging areas such as artificial intelligence.

Accenture Tops Revenue Estimates, Launches $865 Million Restructuring Amid AI Push

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Accenture reported stronger-than-expected fourth-quarter revenue on Thursday and announced a $865 million restructuring program to better align its workforce and operations with rising demand for digital and AI services.

The restructuring, set to run over six months, includes severance costs and selective divestitures, with savings to be reinvested into staff training and operational efficiency. The company recorded $615 million in charges in the fourth quarter and expects another $250 million in the November quarter.

Analysts said the plan underscores both the challenges and opportunities of the AI transition. “Accenture has a strong reskilling operation internally,” said CFRA analyst Brooks Idlet, noting the company’s focus on shifting resources toward higher-demand areas.

The Dublin-based consulting giant emphasized that it will continue hiring while phasing out roles tied to outdated skills. Its new talent strategy includes upskilling employees and using AI to improve productivity.

Accenture also faces challenges from U.S. policy shifts. President Donald Trump this month announced a $100,000 one-time fee for H-1B visas, a move that could increase labor costs for IT and consulting firms. Accenture had approvals for 1,568 H-1B beneficiaries in the first half of the year, placing it among the top 25 U.S. employers in the program. However, CEO Julie Sweet said the impact will be limited since only about 5% of its U.S. workforce is on such visas.

Other headwinds included delays and cancellations in U.S. federal contracts, which made up 8% of revenue in 2024 and trimmed growth this year by about 20 basis points.

Still, demand remains solid. Accenture booked $21.3 billion in new contracts in the quarter, a key indicator of future revenue. The company posted $17.6 billion in revenue, beating analyst estimates of $17.36 billion.

Looking ahead, Accenture forecasts full-year 2026 revenue growth of 2% to 5%, slightly below Wall Street’s expectation of 5.3%, according to LSEG data.

Accenture plans new Andhra Pradesh campus, aims to add 12,000 jobs in India

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Accenture has proposed building a new campus in Visakhapatnam, in the southern Indian state of Andhra Pradesh, with plans to eventually create 12,000 jobs, sources told Reuters. The move would significantly expand its presence in India, which is already Accenture’s largest global hub with over 300,000 employees out of 790,000 worldwide.

The proposal seeks around 10 acres of land under a new Andhra Pradesh policy offering large firms leased land at a token rate of 0.99 rupees ($0.0112) per acre in exchange for job creation. The request is currently under government review but is expected to be approved, according to officials familiar with the matter.

The state recently approved similar projects by Tata Consultancy Services (TCS) and Cognizant, which together plan to generate about 20,000 jobs in Visakhapatnam. Cognizant has pledged $183 million, while TCS has earmarked about $154 million for its facility.

Accenture has not disclosed its planned investment, but if approved, the Visakhapatnam campus would mark another step in the tech sector’s push into Tier-2 Indian cities. Companies are expanding beyond major hubs like Bengaluru and Hyderabad to tap lower land, wage, and rental costs, while benefiting from easier local hiring.

The expansion also comes as the Indian IT sector faces global headwinds:

  • U.S. President Donald Trump’s new $100,000 H-1B visa fee could hurt Indian firms, which are the largest users of the program.

  • A proposed 25% U.S. outsourcing tax could lead clients to delay or renegotiate contracts, adding further uncertainty.

Despite these challenges, India remains a cornerstone of global IT operations, and Andhra Pradesh is positioning itself as a rising destination for major technology investments.