Accenture Shares Plunge Amid U.S. Contract Cuts, Becomes First Corporate Victim of DOGE

Accenture’s stock took a sharp hit on Thursday, falling 7.3%, after the company reported that tightened U.S. federal spending is impacting its revenue. The consulting giant’s Federal Services division has lost key contracts following recent government reviews, CEO Julie Spellman Sweet revealed during the fiscal second-quarter earnings call.

Federal Spending Cuts Hit Accenture Hard

Sweet highlighted that federal contracts made up approximately 8% of Accenture’s global revenue and 16% of its Americas revenue in FY 2024. However, new policies aimed at improving government efficiency have slowed procurement processes, negatively affecting the company’s sales and revenue.

DOGE Initiative Deals a Blow to Accenture

Accenture is among the first corporate casualties of the Department of Government Efficiency (DOGE)—an initiative spearheaded by billionaire Elon Musk under the Trump administration to reduce federal agency costs and streamline operations.

As part of this effort, the U.S. General Services Administration (GSA) has ordered a review of contracts with the top 10 highest-paid consulting firms, leading to the termination of non-essential agreements.

“While we continue to believe our federal work is mission-critical, we anticipate ongoing uncertainty as government priorities evolve,” Sweet said.

Market Reacts Despite Strong Earnings

Despite reporting Q2 revenue of $16.66 billion and earnings of $2.82 per share, Accenture’s stock tumbled due to investor concerns over reduced government contracts.

The stock has now fallen 22.9% in the past month, bringing its year-to-date decline to 14.5%. The broader consulting sector also felt the impact, with Booz Allen Hamilton shares slipping 8.1%.