Accenture Facing Big Changes
Three big changes are in the works for Accenture, the consultancy formerly known as Andersen Consulting.
The first change came in the form of a recent announcement that Accenture has sold its venture and investment portfolio. The sale to CIBC World Markets, the investment and merchant banking arm of Canadian Imperial Bank of Commerce, allows for Accenture to maintain a 5% stake in the portfolio. Accenture stated that as a result of the divestiture the firm will "reduce volatility in future earnings and will discontinue direct venture capital investing." Additionally, Accenture will "no longer accept illiquid securities from clients or alliance partners."
Accenture has also announced proposed pay cuts and a pay freeze for most of the firm's U.S. employees.
Yet another issue facing the consulting firm is the possible risk of losing revenue from federal, state, and local governments as Congress seeks to curb the exodus of U.S. firms that are incorporating offshore to avoid U.S. tax on foreign earnings. Accenture is based in Bermuda. Accenture faces the possibility of losing hundreds of millions of dollars in government revenue should Congress rule in such a way as to affect the firm.
Accenture contends that it is not a U.S. corporation nor has it ever been one. When the company severed ties with U.S.-based Andersen Consulting it incorporated in Bermuda. Accenture has never been incorporated in the United States.
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