Mere days after announcing it had shelved a yearlong global plan to split its auditing and consulting practices into two separate companies, EY is letting go of 3,000 U.S. employees, or about 5% of its 54,000-person workforce, in the coming months.
The cuts will primarily occur within the Big Four firm’s consulting, strategy and transactions, people advisory services, and core business services areas “where growth has notably slowed, or we have significant excess capacity,” EY said in a message to employees that was sent following an all-hands webcast yesterday.
“[W]e have all seen and felt this challenging economic environment over the last few months and resulting headwinds in our business. That has led us to make the very tough but necessary business decision to separate approximately 3,000 U.S. employees, representing less than 5% of our U.S. workforce,” the message said. “Despite actions we have taken across our businesses to delay its eventuality and limit its scope, we must now act, as dozens of other companies have in recent months. Knowing the impact that will have on individuals and teams, we have approached these decisions with the utmost care, respect and consideration.”
The message does not tie the job cuts with the failed global restructuring plan, which was called “Project Everest.” The layoffs will likely occur by the end of EY’s 2023 fiscal year, which concludes on June 30.
EY joins its Big Four rival KPMG, top six accounting firm BDO USA, and consulting giant McKinsey & Co. in cutting jobs in their consulting or advisory businesses over the last two months, as recession fears have resulted in many companies pulling back on their strategic initiatives and dealmaking, lessening the demand for consultants.
The last time EY did a major headcount reduction was in September 2020 when the firm let go of hundreds of employees to cut costs during the early stages of the COVID-19 pandemic.
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Tags: Accounting, Advisory, CAS, Firm Management
