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Market Populism: Karl Cates

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Dec 18

Accenture and Tiger Woods and Outsourcing

Posted by kcates in unemploymentTiger WoodsPamela CraigoutsourcingAccenture


Accenture, you may recall, was last in the news when it declared its divorce from Tiger Woods -- even before word of his wife’s plans to make a similar announcement.  

It’s back already, this time to say instead of firing somebody it will add 45,000 jobs during this fiscal year. Speaking in CFO-speak, this is how Pamela Craig, Accenture’s chief financial officer, put it in a conference call with analysts: “Our pipeline of qualified opportunities has continued to expand and it is now at a higher level than it was before the downturn.  We are now taking clear steps such as in recruiting and business development to position our business for growth.”

Maybe 45,000 jobs don’t sound like a lot in a global economy that’s down many millions of jobs in the Great Recession. But Accenture has about 175,000 employees, so this would represent a payroll expansion of about 25 percent. The bad news is that these are mostly outsourced consulting jobs that don’t pay so great, and many of them are in developing countries. Although Accenture is incorporated in Ireland, its roots are in the U.S., where it split off from the accounting firm Arthur Anderson (remember them?) a decade ago. 

What Accenture does exactly is a mystery to a lot of people whose main association with the company is via its advertisements with Woods. Reuters sums up the business pretty well in this sentence: “Accenture specializes in consulting, technology services and outsourcing, helping companies find ways to improve operations and cut costs.”

If Accenture’s corporate mission is to help other companies cut costs and its core business is consulting, well, it’s probably safe to say these aren’t high-end union jobs in Chicago.

Dow Jones Newswires calls Accenture “the world's largest stand-alone consulting company by revenue,” and notes that it has had two rounds of layoffs this year and trimmed its real estate commitments “to match lower demand.”

However, its stock is up 58 percent since April, when it hit a 52-week low.  It expects second-quarter revenue next year to be less than $5.3 billion, well below analyst expectations of $5.43 billion, but it revised full-year earnings upward to $2.67-$2.75 a share from it previous outlook of $2.64-$2.72.  “We are beginning to see signs of improvement in certain industries and markets,” Chief Executive William Green told industry analysts. 

So the company is issuing a strong signal that there’s a global economic uptick in the offing.  But here the world “global” is as important as “uptick.” Accenture embodies globalism, which features among other things a gradual leveling of living standards.  As developed countries outsource their workforces, something has to give back home, and these 45,000 new jobs will do next to nothing to ease the unemployment rate in the U.S. 

It was fitting that this most global of all companies had such strong ties to Woods, one of the most global of all people. And it was fitting that they were among the first to let him go.


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