Accenture warns Elon Musk’s Doge-led spending crackdown is hitting revenues

Digest opened free editor

Rola Khaleda, FT editor, chooses her favorite stories in this weekly newsletter.

Accenture has warned that Elon Musk’s efforts to reduce spending on the US government have begun to affect its revenues, as the consulting group also sheds light on threats of global economic uncertainty.

The company said on Thursday that the new work of the US government, which represented about 8 percent of its global revenues of $ 16.7 billion in the last quarter, after he took over the management of President Donald Trump in January.

“The new administration has a clear goal for the federal government management more efficiently. During this process, many new purchasing procedures have slowed down, negatively affecting our sales and revenues,” said ACCENture CEO.

Accenture shares opened nearly 10 percent on Thursday, its lowest level since June last year. It later decreased 8 percent to $ 300.04.

The company did not lower the all -year profit instructions, as some analysts expected, but it admitted that the new trends at work were “very modern”.

Accenture is one of 10 consulting companies targeted by the Trump administration in the spending campaign published by the alleged government efficiency department in Musk (DOGE).

Last week, a federal file revealed that a tone contract is likely to reach 5 million dollars of additional work by 2027, “a convenience was completed.” The contract, according to which 10 million dollars have been spent since 2021, was the tenth decade of the dialect or the subcontractor that was terminated under the Trump administration.

The Public Services Department, which helps to coordinate federal purchases, said that the departments and agencies needed to prove the value of consulting contracts with the ten companies-which also include Deloitte, Booz Allen Hamilton and IBM, among other things-or cancel them.

Sweet warned: “While we continue to believe that our work for federal clients is very important, we expect constant uncertainty with the development of government priorities and these assessments are revealed.”

However, she said: “We see great opportunities over time for us to help unify the federal government, update and re -invent it to lead a completely new level of efficiency.”

Last month, Accenture canceled its global goals for its diversity and inclusion after the “evaluation” of the American political scene. The next day of his inauguration, Trump ordered that Federal contractors undertake that they had not had DEI programs that violate anti -discrimination laws.

“In recent weeks, we are witnessing a high level of what was already the great uncertainty in the global economic and genius environment, which represents a shift from the first quarter in December,” Sweet said.

“With the ongoing fluctuations, it is not clear how management guidelines should be seen with confidence,” said Surind Think, an analyst at Jefferies, in a note of customers.

Additional reports from Chris Cook in London