Accenture Grapples With the Dawn of AI Era After Share Slide

In a video address to staff to mark the close of Accenture Plc’s latest financial year on Aug. 31, Chief Executive Officer Julie Sweet struck an upbeat note, hailing the consulting giant’s “big moves” to take on the age of artificial intelligence.

“We have helped our clients navigate every major wave of technology change,” she said in the internal communication viewed by Bloomberg News. “We have reinvented ourselves alongside of our clients; today, we’re again leading this change, and we are built for moments like this.”

For Sweet, 58, who has touted AI as a “tailwind” for the company, it has been anything but smooth sailing with investors that don’t share the same optimism. A sharp selloff in shares this year has brought into focus questions over the Dublin-headquartered firm’s preparedness for an AI pivot, and more broadly, Sweet’s ability to pull off that reinvention.

With almost 800,000 employees on its roster — the bulk of them in low-cost offshore locations such as India and the Philippines — the disruptive technology is posing a threat to Accenture’s labor-arbitrage model. Industry rivals including Capgemini SE, Infosys Ltd. and International Business Machines Corp. that similarly deploy legions of staff face the same challenge as well.

“Do you need that many humans?” said TD Cowen analyst Bryan Bergin, summing up the quandary facing Accenture and its rivals. “That’s a big debate in the market right now.”

Accenture’s shares have plunged 57% from their record high at the end of 2021, wiping out roughly $150 billion in market value. They are down 34% this year despite the support offered by buybacks. Fewer analysts recommend buying the stock now than at the start of this year.

Sweet is expected to address some of these concerns on Thursday, when Bloomberg-compiled analyst estimates show the company is expected to report a 6% year-on-year decline in new bookings for the quarter through August and slowing revenue growth at 2.5%. She is also expected to discuss the business outlook at the firm’s strategy day event on Oct. 14.

Representatives for Accenture declined to comment for this story.

No Different

Like its competitors, Accenture has traditionally sold clients pyramids of staff for projects — typically teams led by senior executives but mostly made of junior staff. In the past, it has tackled quantum leaps in technology, such as the rise of digital and cloud computing.

AI should be no different, Sweet told her staff in the video.

Some disagree. Among them is Matthias Schrader, who sold his business in Europe to Accenture in 2017 and ran that unit until his exit roughly five years later. In a LinkedIn post three months ago, Schrader claimed that under Sweet, Accenture relegated innovation to the back burner and has instead been chasing predictability in processes and quarterly earnings, with heavy reliance on outsourcing jobs to cheaper locations.

“It is precisely this optimization for predictability that killed something that never appears in the numbers: resilience to the unpredictable,” he wrote in German, referring to the sudden threat from AI.

The biggest concern is that AI could drive the base of that pyramid into extinction — meaning clients can make do with far fewer people to achieve the same results in a shorter period of time.

Since Sweet became CEO in 2019, Accenture has expanded its headcount by almost 60%, focusing on growth in low-cost places. Proxy filings from 2025 show that its median-paid worker is based in India, earning $22,733 annually. Many of those employees handle coding work on software customization or man call centers.

Systems integration and application development account for almost half of Accenture’s revenue, and sit in the “two buckets where we see AI disruption,” Susquehanna International Group analysts said in a research note this week, adding they remained “cautious” on their near-term expectations for the firm. They flagged a smaller share at Capgemini and IBM, and a slightly bigger one at Cognizant Technology Solutions Corp.

“You’ve got this huge business and infrastructure set up around a set of services that are going to disappear quite quickly,” said James O’Dowd, chief executive of professional services talent advisory firm Patrick Morgan, adding Sweet and her team haven’t acted swiftly to proof the business against potential AI disruption.

AI Productivity

Despite group revenue growing 60% during Sweet’s tenure, the average generated per employee has fallen about 18% accounting for inflation, increasing 2% to $89,400 in 2025.

“Investors’ concerns center on AI productivity compressing Accenture’s labor-based services revenue faster than new AI work replaces it,” Bloomberg Intelligence analyst Tamlin Bason wrote in a Sept. 3 note.

Sweet took an unusual route to the top of Accenture. She joined the company in 2010 as its general counsel, having previously been a partner at corporate law firm Cravath, Swaine & Moore. Her strengths include the sharp intellect of a corporate lawyer, a willingness to work hard and a laser-focus on customers, according to people who have worked closely with her. She logs hundreds of client meetings a year and was twice diagnosed with breast cancer while at the company — most recently in 2025.

But her recent overhauls — such as efforts to bring a new focus on the mid-market segment and a push into cybersecurity — haven’t assuaged investors yet.

“The pushback from investors that they’re maybe too large to make the pivot is a real concern,” said William Blair research analyst Maggie Nolan. When shares tumbled 18% on June 18 after its third-quarter earnings, Sweet told CNBC that investors were “missing the AI tailwind” and detailed how the firm was positioning itself for the long term.

Her management style can also be controversial, some people familiar with the firm said, adding her approach can be autocratic.

In one call with Accenture managing directors, Sweet graded her own performance with an A, thanks to her many meetings with clients, while giving the collective MDs a C grade, according to people who were on the call. That moment has become a topic for wry jokes among former and current executives, people familiar with the situation said, asking not to be identified revealing private discussions.

Accenture has been spending on acquisitions to try and transform itself, as it did during previous tech transitions, the latest of which were $4 billion in cybersecurity deals. Earlier this year, it agreed to buy British AI startup Faculty to augment its expertise in the technology. JPMorgan Chase & Co. analysts said in a note that such acquisitions are “consistent with Accenture’s playbook of buying foundation capabilities early and scaling them into durable growth platforms.”

In its third-quarter results, analysts pointed out a 2% drop in new bookings year-on-year to $19.3 billion, with managed-services bookings falling about 15% to $9.1 billion. The company blamed it on the Middle East conflict fallout and said some managed-services deals were pushed into the next financial year.

William Blair’s Nolan said the weakness stoked existing fears that AI was disrupting the company without providing a revenue boost. She said she downgraded Accenture to market perform from outperform in June, partly on the basis of the slow uptick in AI revenue.

“I did feel at that moment in time that AI-related work had not yet really translated into meaningful revenue acceleration for Accenture, and I still feel that’s likely the case,” she said.

Go Deeper

For staff, it’s been a lean few years with the company delaying a standard promotion round in 2024, though Sweet flagged promotions this year in her video, announcing the addition of 900 MDs.

Sweet told staff that the firm’s plan in 2027 was to lean into the AI revolution: “I am asking you to go deeper with AI, using it to reinvent how you work,” she said. “Few companies have our willingness to reinvent themselves while helping others reinvent.”

Read More: Accenture Says Staff Can Delay Vacations as Firm Pushes Sales

In many ways, Accenture and rivals have an advantage to ride the AI revolution. Their close ties to clients and decades of expertise selling and implementing waves of new technology are crucial to builders of AI to help get their advanced products and tools to market.

Accenture has already made a start by tying up with Google Cloud and Anthropic for AI-linked work — partnerships Bloomberg Intelligence’s Bason said are a recognition of the firm’s “value-add” in the AI era. However, work with such AI-focused tech clients is only a part of Accenture’s business.

The company has also embarked on a major education program. Staff spent more than 45 million hours training in the 2026 financial year, Sweet said in the video. Last year, she told analysts that she was cutting workers who couldn’t make the switch to AI, adding the overall headcount would still grow in 2026.

The fourth-quarter earnings results this week will give investors another opportunity to parse through the numbers for indications on how AI will translate into meaningful revenue for the firm.

“Accenture isn’t going to just flip a switch tomorrow,” William Blair’s Nolan said, referring to Sweet’s AI tailwind refrain. “They have to get the talent sorted out and the demand will come at a more measured pace.”