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Accenture to fire 1,000 as technology spending declines

Accenture Ltd will fire 1,000 workers by the end of August as customers of the world's largest computer consultant spend less.

Most of the cuts will be made in the US, the UK and Australia, spokeswoman Roxanne Taylor said.

Many will be among managers and other executives in Accenture's consulting business, which helps companies select and install computer systems. The company employs 75,000, she said, and the firings will reduce the staff by 1.3 percent.

Corporations are cutting spending on information technology as the economy slumps. Accenture's computer-services rival Electronic Data Systems Corp said last week it was firing 2,000 workers, and KPMG Consulting Inc. has said falling demand for advice is forcing the company to cut jobs this year.

"The one disappointing read on this is they probably aren't seeing an imminent recovery," said Jeff Parker, who manages the Pimco Target Fund. "If they were, they wouldn't be cutting jobs."

The fund holds 800,000 Accenture shares, including 300,000 bought in the last several months, Parker said.

The shares of New York-based Accenture fell US$0.33 to US$17.57.

They have dropped 35 percent this year. The company, formerly Andersen Consulting, raised US$1.67 billion in an initial share sale last July. It eliminated 1,500 jobs last year.

New clients announced this year include Cendant Corp's Resort Condominiums International Europe, Airgas Inc and Inco Ltd's Goro Nickel nickel-cobalt mining project in Australia.

Accenture will manage some of Cendant's payroll and accounting work and accounts payable processing at Airgas, and it's providing computer services to the Inco unit.

"Europe is continuing to be difficult and could be getting worse; the US has stabilized," said Natalie Walrond, an analyst at Pacific Growth Equities. She rates the stock "buy" and said she doesn't own it.

Sales in the third quarter ended in May were expected to rise from the year-earlier period by less than 1 percent, to US$3 billion, the average estimate of analysts surveyed by Thomson First Call.

Accenture, which plans to report results Friday, is expected to have earned US$0.26 a share, according to First Call.

Accenture usually hires as many as 17,000 workers and fires as much as 5 percent of its staff each year, Taylor said.

The company expects to have 83,000 workers when its next fiscal year ends in August 2003.

Reuters reported on the latest firings earlier yesterday.

The company separated in 2000 from parent Andersen Worldwide, which also owned auditor Arthur Andersen LLP.
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