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Consulting big Accenture warned that Elon Musk’s efforts to slash prices throughout the US federal authorities had began to have an effect on its revenues and geopolitical developments had raised financial uncertainty all over the world.
The corporate stated on Thursday that new work for the US authorities, which accounted for about 8 per cent of its $16.7bn in world income within the quarter ended February 28, slowed sharply after President Donald Trump’s administration took workplace.
“The brand new administration has a transparent aim to run the federal authorities extra effectively. Throughout this course of, many new procurement actions have slowed, which is negatively impacting our gross sales and income,” stated Accenture chief government Julie Candy throughout an analyst name.
Accenture is one in every of 10 consulting companies focused by the Trump administration within the spending crackdown orchestrated by Musk’s so-called Division of Authorities Effectivity (Doge).
Final week, a federal submitting disclosed that an Accenture contract probably value as much as $5mn of extra enterprise by 2027 had been “terminated for comfort”. The contract, underneath which $10mn has already been spent since 2021, was the tenth Accenture contract or subcontract terminated underneath the Trump administration.
The Common Companies Administration, which helps to co-ordinate federal procurement, stated departments and businesses wanted to show the worth of consulting contracts with the ten companies — which additionally embrace Deloitte, Booz Allen Hamilton and IBM, amongst others — or cancel them.
“Whereas we proceed to imagine our work for federal purchasers is mission important, we anticipate ongoing uncertainty as the federal government’s priorities evolve and these assessments unfold,” Candy warned. Nonetheless, she stated: “We see main alternatives over time for us to assist consolidate, modernise and reinvent the federal authorities to drive an entire new degree of effectivity.”
Accenture shares had been heading in the right direction to open at their lowest degree since July final yr, after falling greater than 5 per cent in pre-market buying and selling on Thursday. The corporate didn’t lower its full-year earnings steering, as some analysts had anticipated, however it admitted that the brand new traits within the enterprise had been “very current”.
“In current weeks, we’re seeing an elevated degree of what was already vital uncertainty within the world financial and geopolitical atmosphere, marking a shift from our first quarter in December,” Candy stated.
Surinder Thind, analyst at Jefferies, stated in a word to purchasers that “with ongoing volatility, it’s unclear how confidently administration’s steering needs to be seen”.
Further reporting by Chris Prepare dinner in London
