US President Donald Trump’s new Department of Government Efficiency (DOGE) — aimed at streamlining federal spending — is making its mark as IT services giant Accenture points to pressure from a slowdown in the US federal procurement.
With Indian IT firms having a large exposure in the US, analysts in India are keeping a close watch on how the unfolding developments weigh on tech spend.
Accenture CEO Julie Sweet has acknowledged that the company’s federal services revenue has been impacted by shifting government priorities. “While we continue to believe our work for federal clients is mission critical, we anticipate ongoing uncertainty as the government’s priorities evolve and these assessments unfold,” she said.
The IT services major also pointed to the elevated level of uncertainty in the global economic and geopolitical environment in recent weeks. Despite elevated uncertainties, the company has narrowed FY25 revenue growth guidance to 5-7 per cent (earlier 4-7 per cent), toward the upper end of the range.
The Nifty IT Index has corrected around 15 per cent so far in 2025 and underperformed broader markets by around 13 per cent.
“At the beginning of 2025, we were optimistic that the ensuing macro improvement could lead to improvement in tech spending and growth acceleration.
However since then, elevated uncertainty around US tariffs, global macros, and geopolitics weighed on tech spending,” said Emkay Global in a report on Friday.