Although EY continues to deny it, Accountants Daily reports that lead partners at EY Australia have been instructed to draw up a list of everyone who isn’t pulling their weight so they can figure out who to chop, per a source. AD’s sources made it sound like no one is safe, not even partners.
Sources at the firm told Accountants Daily that no-one would be safe from the lists, which would be drawn up by lead partners running service lines – who sit atop the 700-plus Australian partner hierarchy – and used to inform a headcount reduction.
“They have been asked to come up with a list of people who need to be performance managed,” the sources said. “That’s code for people who haven’t hit targets – that includes partners, directors, senior managers, people who are meant to bring in revenue and are not hitting targets.”
Australian Financial Review was given the same information about naughty lists. EY Oceania managing partner David Larocca had this to say about that:
“I don’t know what that is because it’s not true. We’re in a strong position, we have no current plans to reduce our headcount and we’ll continue to make decisions as we always have,” he told the Financial Review.
“What I want to also say is performance management is BAU [business as usual]. Any high-performing organisation recognises high performance and equally addresses performance that isn’t meeting expectations. However, there are no current plans for wide scale redundancies or reducing our headcount.”
Strategy & Transactions folks at were apparently told last week there will be no bonuses because the team missed their revenue target by one percent and there will be fewer promotions than last year however leadership said there won’t be any layoffs.
US leadership has already told partners to “stay close” to clients and bill “every hour [they] can get [their] hands on.” Bringing in and maintaining business is of utmost importance not only because Everest sucked a half a billion dollar hole in EY’s pocketbook but also to stop the bleeding from the reputational injury Everest’s failure has left on the global firm.
We aren’t sure if this is the case in Australia but in the US anyway it’s been suggested that EY is using secret layoffs to trim headcount, and we’re talking long before Project Everest burned to the ground. That’s on top of the 3,000 people (5% of its workforce) that EY US admitted to laying off just days after Everest fell apart. The firm cited “overcapacity” and economic conditions for the layoffs, though as far as we know EY kept its hiring targets modest and may have even frozen hiring completely in some areas and service lines due to the uncertainty and cost of Everest (you know, before it went kablooey).
Almost immediately after Everest’s collapse, staff in the UK were warned that cuts would be forthcoming. Sources told Accountants Daily EY Australia would be unable to avoid job cuts because all 13,000 global partners want to recoup the lost money, the Americans’ gaslighting about money saved on projects aside (leadership has said that Everest actually saved the firm $400 million that would have otherwise been spent on projects deferred while they worked out the deal). “They’ll make up the $US600 million by sacking people,” the sources said to AD. “The cuts will come from core business services such as marketing, communications and HR.”
If EY Australia ends up letting go the same amount of people as EY US (5%), that’s more than 400 people without a job.
The firm categorically denies this assertion and insists there are no plans to reduce headcount (see above re: silent layoffs then). “There is no question we are in a very different market to the past couple of years, with headwinds and uncertainty ahead of us,” a spokesperson said. “We are still experiencing solid growth and demand for our services across many parts of our business. We have pulled back on recruitment where necessary. We do not currently have any plans for reductions in our headcount.” Bet.
As for the abrupt departure of EY Oceania talent head Elisa Colak, sources told AD she was leaving “voluntarily” and did not have another job lined up. She spent eight years at the firm and to hear the sources tell it, leadership begged her not to go. “It is with a great deal of disappointment that I advise you that Elisa has decided to take a change of direction in her career and chosen to finish in her role with the firm at the end of May,” said COO Craig Robson. EY staff may feel another sort of way about her exit,
EY Australia had much higher turnover than its competitors at Deloitte, KPMG, and PwC in the year to March 2022 so it’s there isn’t much fat to trim should they decide they need to do so. It was always obvious that at least some admin people would have to go once Everest fell apart but it sounds like they aren’t the only ones who should be worried.