Accenture freezes pay, slashes salaries of partners
8/6/02 12:35 PM
NEW YORK, Aug 6 (Reuters) - Accenture Ltd, the world's largest provider of management and technology services, is cutting pay at its top ranks and will stop awarding stock options to partners as it battles a prolonged downturn in the consulting industry, a spokeswoman said on Tuesday.
The Bermuda-based company said it would cut the salaries paid to partners by about 7 percent to 8 percent for its fiscal year starting in September. In addition, it said, it would not grant performance-based stock options to its 2,700 partners this year. It is also reviewing its overtime pay policy.
"The salary/compensation measures that have been reported are part of our strategy to control costs and bring compensation more in line with the marketplace," Accenture spokeswoman Roxanne Taylor said in a written statement.
The company, like many of its peers, has struggled in recent quarters as major clients shied away from spending on large technology projects during the economic slump.
As demand for its services weakened, Accenture has tried to keep a tight rein on costs. The company, which went public last year after breaking away from accounting firm Andersen, has repeatedly slashed jobs, including a move last month to cut 1,000 jobs, or 1 percent of its work force.
Accenture on Tuesday also confirmed it would cut the salaries of some executives below the partner level, and that base pay for most other employees would remain frozen in the upcoming fiscal year.
The only employees who will receive salary increases will be those who are promoted, and even among those, several will receive bonuses instead of pay increases, the company said.
Accenture has forecast sluggish revenue growth for its next fiscal year and expects to post a single-digit percentage decline for its fourth quarter that ends Aug. 31.
Last month, Chief Executive Joe Forehand told Reuters that Accenture was closely managing its travel expenses, training employees through the Internet, rather than sending them to classrooms around the country, and had redesigned its offices to save costs.
Hopes for a recovery this year within the sector have largely been pushed back to next year and analysts expect it to be a slow one at that, in contrast with the heady days of the 1990s, when consultants racked up double-digit increases in profits. |
