Accenture faces revenue challenges from reduced U.S. federal contracts

Accenture CEO Julie Sweet discussed the company's challenges during a recent earnings call. She pointed out that reduced US federal spending is affecting Accenture's revenue. This decline is largely due to the loss of government contracts related to changing priorities in the new administration. Sweet mentioned that the Federal Services business, which produced about 8% of Accenture's global revenue and 16% of its revenue in the Americas for fiscal year 2024, has faced contract losses after government reviews. She said the company anticipates ongoing uncertainty as the government reassesses its priorities. Following Sweet's comments, Accenture's shares dropped by 7.3%. This decline highlights the impact of a federal efficiency initiative called DOGE, led by Elon Musk during the Trump administration. The initiative aims to reduce costs by cutting federal jobs and downsizing agencies. Sweet also noted that new guidelines from the US General Services Administration prompted agencies to review contracts with top consulting firms. This has added to the uncertainty in the economic and geopolitical environment. Despite these challenges, Sweet expressed confidence in the strong fundamentals of Accenture's industry.