Mere hours ago, Wall Street Journal reported that EY is laying off “dozens of partners across all U.S. business” and not only in lower-demand service lines. As with most of the cuts we’ve seen this year, consulting is most affected with their partner ranks being trimmed by ten percent, four percent in strategy and transactions. Says WSJ, there will be cuts in audit and tax as well though they didn’t share numbers.
WSJ:
EY began to inform affected partners last week, with notifications expected to continue this week, the people said. Some U.S. partners tend to be cut annually over unsatisfactory performance, but the cuts under way are larger than usual, the people said.
The accounting firm said the U.S. layoffs affect a “limited number of people.” It also deferred start dates for some new hires in certain areas, a spokesman for the U.S. unit said. “These decisions have been thoughtfully made with respect and fairness for all of our people and the future of our business,” the spokesman said. “EY will offer comprehensive support to those who are affected.”
“As part of our long-term planning, EY has been transforming our business to focus on the areas where our clients have the greatest needs,” the spokesman added.
“EY Is Laying Off U.S. Partners Amid Tough Economic Conditions,” WSJ December 12, 2023
It’s been a rough year for EY. First, and most significant, the dream of tens of billions of post-split consulting bucks came crashing down when infighting killed Project Everest in April. This left a $500-600 million hole in EY’s pocket, a hole the firm told partners would be plugged through “a combination of bank borrowing and accounting maneuvers to ensure that the dead-deal costs have ‘minimal’ impact on partner earnings” (“EY Confronts Slowing Growth After Breakup Deal Fails,” WSJ April 20, 2023).
Then, and totally unrelated to Everest even though it happened literally right after it failed, the EY US laid off 3,000 people, the largest number of layoffs we’ve seen from any Big 4 firm in recent memory. Then came deferred start dates, some of those have been delayed a second time and pushed back to August 2024 (“Your early experience in the practice is important for setting you on a strong trajectory, and we believe that you’ll have a better opportunity to grow, develop and progress in the practice with an August 2024 start date,” said the firm in an email to new hires in November).
In September, EY reported global revenue of $49.4 billion which puts them a whole $15.5 billion behind #1 Deloitte.
And now they’re letting partners go. Right before Christmas. Rough! Godspeed to the affected, there are surely greener and less flaming bags of dog shitty pastures out there for all of you.
Oh no, the outside firm job market is shitty too. CPAs must reevaluate their worth and begin charging rates which reflect our value. Further, CPA forms has to reform the inside of all forms small and large to bring young CPAs along the knowledge path. The firms of all sizes have done a shitty job as far back as when I joined In 1986. The CPA profession is the most demanding knowledged based profession in the world but we the CPAs treat our selves like beggars when it comes to charging proper fees to do a proper job and limit liability. I wish I knew before I started taking accounting in college that this was the profession; low pay, long hours, zero quality training, zero thank you, and discarded as worthless.
Couldn’t have been said better. And the long-time model is not as effective as it once was, and arguably broken. Workforce cultures have changed and those in leadership positions refuse to accept change. Thankfully only a few more years until i’m out.