Ed. note: We’ve received some additional information about layoffs, see update at the bottom.
The other day Grant Thornton sent out a firmwide email packed with words like “difficult but necessary decisions,” “values and culture,” and “continued investment in growth” to inform everyone that heads were soon to roll. While pointing out that “unlike peers,” GT’s revenue growth had been strong through March versus the prior fiscal year “thanks to the superb client service our team delivers,” the email said senior leadership would have to make personnel changes “as targeted and limited in scope as possible.” TL;DR the economy sucks, clients are pulling back on consulting work, and some people gotta go.
Grant Thornton’s revenue for the fiscal year ended July 31, 2022 was $2.3 billion, up by nearly 17% compared to the year prior ($1.97 billion). 2022 was a spectacular year for them but, you know, things happen. Consulting is slowing down and the sky high attrition of last year and the year before has now cooled down, leaving firms across the board with more people than they expected to have. Accountant shortage where?
Revisiting what GT CEO Seth Siegel said when the 2022 revenue numbers came out in October: “Our FY 2022 revenues demonstrate how effectively we’re delivering against our firm’s purpose: to make business more personal and build trust into every result. Not only are we providing clients with high-quality solutions and a peerless experience across our audit, tax and advisory service lines, but we’re doing it by supporting and caring for our people—enabling record-setting business performance in the process.”
So yeah, anyway, LAYOFFS.
In Risk Advisory, leadership held a “survivors” call with remaining team members on Tuesday and mentioned that low attrition necessitated these cuts. Added a tipster:
They said it won’t affect bonuses and salary increases at year end discussions [in two weeks].
It seems for that team anyway the damage was spread around all levels with around three each of associate, senior associate, manager, and senior manager let go.
That’s what we heard on our end. Wall Street Journal has better little birds than we do and had this to say:
Grant Thornton is laying off about 300 U.S. employees, or roughly 3% of its workforce in the country, people familiar with the matter said, as the professional-services firm navigates declining demand for its advisory and tax services.
The Chicago-based firm will have laid off the workers, mostly in the advisory and tax divisions, by the end of Thursday, the people said. Grant Thornton employs about 9,000 people in the U.S. and more than 68,000 globally.
In the email that first went out informing employees layoffs were coming, all service line leaders were mentioned — Janet Malzone, Renato Zanichelli, and Wade Kruse — so it was assumed cuts would be somewhat evenly spread around, though we did expect Advisory to have a slightly bigger portion. The firm said “pockets of underutilization” drove many of the cuts.
If anyone has more numbers or just would like to vent, reach out.
Update: A tipster tells us layoffs affected about 120 people in tax, mostly A1s but all levels had some losses. They add:
The worst part was that local partners had no input. All cuts were solely based on utilization and the assumption if you weren’t utilized enough you should be gone. Total ego move by upper management. People are way more upset than past layoffs because of how it was executed (solely based on number on a paper). Trust in all leadership is very low at all levels.