Maybe! Nevermind people leaving involuntarily for a second.
We’re hearing from many that people are heading for the exits en masse and it’s getting the bigwigs’ attention. According to one reader:
“[A]pparently its got higher ups here a bit worried. It was an agenda [point] for a [recent manager] meeting. Just wondering how it was elsewhere. “
Of course, this leads to many, many, many teams finding themselves short-staffed. We just heard that the New York office of one Big 4 firm has been contacting other offices aggressively recruiting audit personnel for huge advisory engagements. This has been received with a resounding “GET BENT” since those offices desperately need the people for their local audit engagements.
It can be easily argued that the reason people are bolting is because of the pay freeze trend or since no one’s job seems to be safe, people are simply taking matters into their own hands.
So discuss in the comments what you’re seeing, hearing, and speculating about regarding people leaving your firm. This may be an office by office phenomenon so we’ll put out to you to give us the details for your office, your team, your firm in general.
Category: Big 4
If it happens at a Big 4 accounting firm, we’re talking about it here.
E&Y Layoff Update
Jump back to our post from yesterday to read the latest on this week’s cuts at E&Y.
Big 4 Sick Days: Open Thread
Since Team Jehovah is nabbing all the swine flu vaccine, there’s a pretty decent chance that some of you might come down with the H to 1 to the N to the 1. That has at least one reader concerned:
Can you look into the sick day policy at the Big 4’s? Is KPMG the only one who does not give any sick days? If you are sick you take the time from your PTO allowed (the days reduce your vacation time). I have seen people literally dying in the cubes – with temperatures, the chills etc – yet they insist on coming to work since they have no days left or don’t want to use their vacation time. Is this a responsible policy during the H1N1 epidemic???
We touched on this briefly but it’s worth revisiting since the swine flu coverage in the MSM is reaching fever pitch.
Discuss in the comments your firm’s sick days policy, if it’s forcing the bedridden to report, or it’s handing out surgical masks to everyone. Oh, and if you’re sick, for crissakes, stay home.
The Deloitte Lawsuit Du Jour
Deloitte is doing a damn fine job of keeping attorneys in business these days.
Two founders of casino industry supplier Global Cash Access Holdings Inc. [(“GCA”)] of Las Vegas are suing an accounting firm, charging it harmed them by disclosing information in an FBI bulletin they say wrongly associated the founders with criminal activity.
Attorneys for Robert Cucinotta and Karim Maskatiya filed suit Friday in federal court in Las Vegas against Deloitte & Touche LLP and Larry Krause, managing partner of Deloitte’s Nevada practice.
Asked about the allegations Monday, Deloitte & Touche said in a statement: “We believe the complaint to be without merit and intend to defend against it vigorously.”
The lawsuit alleges that Deloitte told GCA’s audit committee that Cucinotta and Maskatiya were involved in criminal activity including, ‘murder, extortion, tax fraud and financial fraud, and also may be subject to substantial back taxes.’
That didn’t go over well:
Cucinotta and Maskatiya assert Deloitte didn’t contact them or investigate the information in the FBI Bulletin before contacting the GCA Audit Committee; and that Deloitte demanded that GCA investigate the allegations and said it wouldn’t certify the third quarter 2007 financial statements until the probe was completed.
The actions by Deloitte caused GCA to announce on Nov. 14, 2007, it would delay filing its quarterly financial report with the Securities and Exchange Commission pending conclusion of an investigation into “confidential” issues, the lawsuit says.
“Predictably, the market reaction to that shocking press release was brutal and GCA market capitalization declined by $400 million,” the lawsuit charged, adding Cucinotta and Maskatiya together lost almost $100 million in a single day.
GCA hired Skadden Arps Slate Meagher & Flom to perform an internal investigation and the subsequent report found, ‘no evidence that (Cucinotta and Maskatiya) engaged in serious wrongdoing or are under investigation by law enforcement officials.’
Deloitte, still sketched out by Cucinotta and Maskatiya, threatened to resign as the auditors of GCA if they didn’t remove themselves from the company’s board of directors. Eventually the two men agreed and ‘pursuant to seriously oppressive terms’ sold all their shares in GCA back to the company.
So C&M get strong-armed into selling their shares back to company at a huge loss and now they want to Deloitte to settle up. While the plaintiffs’ seem to have a legitimate beef, was Deloitte acting as they should have?
Sure, maybe they jumped the gun with the information. It’s not uncommon. If you assume that Deloitte informed the audit committee that C&M were bad dudes to protect GCA’s investors, then they were probably acting in good faith (insane as that may seem). Auditors just can’t seem to win.
Casino supply company’s founders sue over link to criminal activity [Las Vegas Sun]
(UPDATE) Layoff Watch ’09: Update on Ernst & Young
In addition to the layoffs we reported on yesterday in Chicago and Dallas, we now have reports of cuts in Los Angeles, San Francisco, and Irvine. Our source on the left coast speculates that the current round can’t be too large in scope since everyone is already stretched thin.
So far it’s been in assurance only and we’re scant on details for severance so get in touch if you find yourself with some extra time on your hands or you have details on the numbers in your office.
UPDATE, Wednesday Nov 11th: Our sources are now reporting layoffs in the tax practice including the tax managing partner for the Phoenix office, and an executive director in Denver. We also have reports on tax layoffs in the Southern California offices. Per our source:
• Los Angeles: 4 that I know of. At least 1 Senior, 1 Staff
• Irvine: 4 that I know of. At least 1 staff
• San Diego: 4 that I know of. 3 Senior managers, 1 Senior.
Senior managers are reportedly receiving three months pay and A2’s are receiving one month for severance. Continue to keep us updated.
UPDATE 2, Thursday, November 12th: Twelve advisory professionals in the Pacific-Northwest region.
UPDATE 3, Friday, November 13th: Charlotte office dismissed three audit SA1’s. In the North Central region: Pittsburgh, Cincinnati, and Cleveland offices all laid off three SAs. Twenty total layoffs reported between Pittsburgh (at least three), Cincinnati (at least three), Cleveland (3), and Detroit.
UPDATE 4: Saturday, November 14th: ~5-6 audit professionals in Minneapolis and ~1-2 audit in Milwaukee.
Chicago: In addition to the ~20 layoffs we originally reported there were ~2-3 in support roles were let go.
Rumor Mill: PwC Is Pretty Sure That No One in Assurance or Tax Will Be Laid Off
Bob Moritz, the U.S. Chairman, is trying to calm everyone down, as an email has been sent to the troops letting them know that it’s unlikely that there will be layoffs in the Assurance or Tax practices. We haven’t been able to track down a copy of the email yet but that’s the gist.
While this is good news, we would be more comforable if the email would have read something like:
“We’re absolutely, 100% sure that no one in Assurance and Tax will be laid off like we just did in Advisory. Write it down. No one. Not even you, guy that dicks around in the cubicle by the window so that he can see everyone approaching. Your utilization is in the crapper but it’s cool. You’re safe.”
Or he simply could have just added the photo to the email so everyone would feel better. Nothing says, “trust me” like a fresh pair of P. Dubs tighty-whities, amiright?
Another KPMG Shake-Up
Following up on our earlier reports of leadership changes in several cities, — as well as the Southeast region — the Charlotte Business Journal is reporting that John Switzer now sits in the big chair of KPMG’s Charlotte office.
Swizter ascended to the new gig after serving as the managing partner of the Cleveland, Louisville, and Lexington offices.
This appears to be another restructuring switcheroo as Switzer’s predecessor, Paul Chapman, will be “[taking] a new role, serving some of the firm’s largest audit clients.”
As prestigious as that sounds, we’re inclined to believe that the bigwigs decided some fresh blood was needed in Ken Lewis land.
If you’ve got any news on freshly minted grand poobahs in your office, kindly pass along the details and feel free to speculate on the progress of the restructuring in the comments.
KPMG names managing partner [Charlotte Business Journal]
Big 4 Alumni Watch: Ex-KPMGer Wants You to Please Yourself (or Someone Else)
When considering your next professional move, do you take the time to ponder all the options? Oh sure, controller, technical accounting manager, CFO all sound nice but do they really get you excited about your work?
If you answer yes, then stop reading and return to Forbes.
Former Klynveldian, Matt Thomas is the co-founder of La Coquette a website for sex toys, paddles, handcuffs and other adult accessories. Unlikely as it may seem for an ex-Big 4 type to get into the business of sensual delights, he clearly is a master of utilizing critical thinking skills:
“sex has always sold – and we thought there was a gap in the market for really good quality products.”
Hear that? ‘A gap in the market for really good quality products’. Have you been able to find something that can provide eight hours of 24k bliss? How about leopard nipple tassels? Crystal handcuffs? Didn’t think so.
Plus, that device that you’ve dreamed about that plugs into your iPod and provides magical pleasure to the beat of JT? Dream no longer. The Naughtibod Vibrator will only set you back £46 and batteries are included.
Suffice to say, the man is far more interesting to talk to:
“It is a brave new world,” he laughs. “At dinner parties and weddings I used to tell people I was an investment banker and that would be that. Now, they’re hanging onto my every word!”
Although we understand Matt’s excitement about his newfound popularity, it can’t be that hard to keep someone’s attention if you’re carrying around a picture of a Shiri Zinn Minx vibrator. Call it a hunch.
Ex-Banker Tries His Luck with Sex Toys [City AM]
Jim Quigley Couldn’t Wait to Tell Everyone That Deloitte Will Be the New Auditor of Satyam
Jimbo obviously had ants in his pants and he couldn’t keep it to himself because after saying it’s a ‘done deal’ he admits, “The company is the one who would make the announcement. So I ought to be more cautious in terms of not speaking for them. We are prepared and ready to step into that role.”
Oh. So maybe JQ is talking out of school but he backpedaled nicely. We understand your excitement Jim but we also know that discretion is in order. Next time though, just throw caution to the wind. In fact, if it strikes you, don’t be afraid to mention how PwC screwed the pooch and their attempt to weasel out of the whole thing is a travesty.
Deloitte says will be auditors for Mahindra Satyam [Money Control]
Rumor Mill: PwC Tax Practice Eyeing Utilization
We’ve received a tip that human resources for PwC has made calls to staff saying “the lead partner [of the] group is reviewing everyone’s utilization numbers one person at a time.”
This is occurring in at least one industry group in the New York tax practice. Although our source stated that it was not unexpected for utilization to be scrutinized, it seemed unusual for a lead partner to be examining so many individual utilization numbers. Then again, PwC isn’t really known for a transparent performance review process.
Since the forced ranking trend seems to be in full effect, this could be the new standard operating procedure. The timing also seems dubious in the wake of (or during) last week’s layoffs in the advisory practice.
If you’ve recently been informed that your utilization rate is getting a close eye (and this comes as surprise) or if you know of the motivation behind such close inspection, email us at tips@goingconcern.com.
Layoff Watch ’09: Ernst & Young
We’ve received tips that layoffs have recently occurred in both the Chicago and Dallas offices of E&Y. The reports out of Chicago were that layoffs occurred on Friday and over the weekend.
Our source told us that the Friday layoffs were seniors in the Retail and Consumer Products industry group and weekend layoffs were across as well as other industry groups. Altogether approximately 20 professionals.
We have fewer details on the Dallas layoffs except that they were a couple of managers from the asset management group in the audit practice. The small number leads us to speculate that these were performance related, similar to the cuts we reported in August.
There have been several rumors circulating about layoffs occurring this week at E&Y and other firms as well so if you have more details on the Chicago or Dallas layoffs or know of cuts in your office, send us the details to our tips line.
KPMG Has Its Reasons for Banning Google Talk
Klynveldians have been warned about certain software that should not, under any circumstances, be downloaded by any of you:
In the firm’s defense — and since they didn’t mention it — many of these programs are used by you to waste precious billable hours complaining to each other about a myriad of things including why the Phil Mickelson hats only come in black and white and where Tim Flynn and John Veihmeyer buy their suits (we hear Marshall’s but that could be total bupkis).
Furthermore, we’re not going to sit here and say that none of these programs present a legitimate risk. That would be foolhardy and insensitive.
What we do wonder about is what “disciplinary action” involves. Feel free to wildly speculate on this in the comments.