In response to a continuing industry slump, Accenture, the consulting firm that went public after separating from Andersen, is implementing a drastic austerity program to cope with today's tough times for the consulting industry.
The firm has said it will cut partner salaries by about seven to eight percent for the fiscal year beginning September 1, 2002. It will also cut the salaries of some staff below the partner level, and the base pay for most other employees will remain frozen.
The only employees who will receive salary increases will be those who are promoted, and even among those, several will receive bonuses instead of pay increases.
In other cost-control measures, Accenture will not grant performance-based stock options to the firm's 2,700 partners this year, and it is reviewing the overtime pay policy for employees.
This latest round of belt-tightening follows a series of job cuts that resulted in the elimination of 1,000 positions last month. The firm has also been trying to cut costs by closely managing its travel expenses, training employees through the Internet, rather than sending them to classrooms around the country, and redesigning its offices.
Like other consulting firms, Accenture has lost revenues as companies have postponed spending on information technology projects during the economic downturn. Hopes for a recovery in this hard-hit industry have been pushed back to next year.