IT services provider Accenture cut its fiscal-year 2024 revenue forecast on Thursday, as an uncertain economy prompts clients to curtail spending on its consulting services, sending its shares down around 5.6 per cent in premarket trading. Accenture now expects full-year revenue growth in the range of 1per cent to 3per cent, from its prior forecast of 2 per cent to 5 per cent. The firm has been grappling with sluggish demand for its IT and consulting services as high-interest rates slam the brakes on an industry that benefited from breakneck growth during the pandemic.

That has led the company to lay off employees, with Accenture set to book $450 million in severance-related costs this fiscal year after recording $1.1 billion the previous year when it said it would cut around 19,000 jobs, or 2.5 per cent of its workforce. Rivals Tata Consultancy Services and Infosys, two of India’s top consulting firms, also reported downbeat quarterly results earlier this year as spending dries up.

Analysts from Baird Equity say growth in the industry has been decelerating over the past six quarters and that it “might take a couple of years for Accenture to return” to mid- to high-single-digit organic growth. The company also forecast third-quarter revenue in the range of $16.25 billion to $16.85 billion, below an estimate of $17.01 billion, according to LSEG data. New bookings, a key indicator of future revenue, fell 2 per cent to $21.58 billion for the second quarter, while revenue for its Communications, Media & Technology segment fell 8 per cent year-over-year.

Accenture reported revenue of $15.80 billion, slightly lower than analysts’ estimate of $15.84 billion. On an adjusted basis, the company earned $2.77 per share, compared with an estimate of $2.66 per share.