Lock the White House Watch Newsletter for free
Your Guide to Washington and the World’s 2024 US Election Means
The consulting giant accent warned that Elon Musk’s efforts to cut costs across the US federal government began to affect revenues, and geopolitical developments have increased economic uncertainty around the world.
The company said Thursday that the new U.S. government job, which accounted for around 8% of global revenue for the quarter ended February 28, slowed sharply after President Donald Trump took office.
“The new administration has a clear goal of running the federal government more efficiently. During this process, many new procurement measures have been slowed down, which has negatively impacted sales and revenue,” Accenture CEO Julie Sweet said during an analyst call.
Accenture is one of ten consulting companies targeted by the Trump administration in oppression of spending, organized by Musk’s so-called Office of Government Efficiency (DOGE).
Last week, federal filings revealed that by 2027, the potential Accenture contract, which amounts to an additional business of up to $5 million, will “cease to be terminated for convenience.” The contract, which already has $10 million spent since 2021, was the 10th accent or subcontract agreement that ended under the Trump administration.
The General Services Agency, which helps coordinate federal procurement, said departments and agencies should also prove the value of consulting contracts with 10 companies, including Deloitte, Booze Allen Hamilton and IBM.
“We continue to believe that work for federal clients is mission-critical, but as government priorities evolve and these assessments unfold, we anticipate continuous uncertainty,” Sweet warned. However, she said: “We look at great opportunities to support federal integration, modernization and reform, and promote a whole new level of efficiency.”
Accenture shares were scheduled to open at their lowest level since last July after falling more than 5% in pre-market trading on Thursday. The company did not cut its annual revenue guidance, as some analysts had expected, but acknowledged that the new trend in the business was “very recent.”
“In recent weeks, we have seen levels of rise that have already been significant in the global economic and geopolitical environment, indicating a transition from the first quarter of December,” Sweet said.
“It’s unclear how management guidance should be reviewed due to ongoing volatility,” Jefferies analyst Surinder Thind said in a note to client.
Additional Reports by London Criskook
