IT consultancy Thoughtworks lays off 500 employees

Thoughtworks, a Chicago-headquartered IT consulting firm, last week announced it will lay off 500 employees, or approximately 4% of its global workforce.

“These changes were necessary to support the future growth of our business," a company spokesperson told Reuters.

Thoughtworks reported $1.3 billion revenue in 2022, an increase of 21% from 2021. The firm had an overall net loss of $105 million in 2022 compared to a net loss of $1 million in 2021.

The IT consultancy is projecting a 5% year-over-year revenue decline in the first quarter of 2023.

Thoughtwork’s share prices have dropped to $7.74, down 78% from an IPO high of $34.41 in September 2021. The firm has a current market cap of $2.4 billion.

The announced job cuts will affect a global workforce of 12,500 employees spanning 18 countries in the Americas, Europe, and Asia. Thoughtworks delivers consulting services in customer experience, product, and design; data and AI; digital transformation and operations; and enterprise modernization, platforms, and cloud.

The layoffs arrive roughly a month after Thoughtworks acquired Itoc, an Australian AWS consulting partner with 70 employees.

Thoughtworks joins a growing list of IT firms that are laying off large portions of their workforce. Google has announced 12,000 job cuts, Microsoft is axing 10,000 jobs, and Salesforce is cutting 6,500.

Consulting firms are also poised to make cuts amid reduced demand and toughening global economic conditions. KPMG US was the first of the Big Four accountancies to cut jobs, last month announcing 700 layoffs in its advisory business.