Across the pond, Big 4 firms are struggling to generate deals business in this lackluster economy and as expected this has led to some cuts. KPMG let 6 percent of their deals people go in October, up to 600 people at PwC were asked to leave or get fired in November, and 150 more people were punted out of EY just days before Christmas on top of the five percent of the 2,300 people in financial services consulting chopped in August. It’s rough.
Thankfully people with big mouths regularly speak to Financial Times which is how we now know about a survey in EY’s strategy and transactions business that accuses leadership of being as transparent as a lead wall. Staff still around after the last round of cuts used words like “shocked,” “defeated,” and “insecure” to describe how they feel after watching their colleagues get culled like unnamed tributes from a distant district.
FT:
Staff in EY’s UK deals business have hit out at the company’s management for the way recent job cuts were handled, saying “trust is broken” and that employees feel “deflated” as sales in the department slump.
In a survey, employees at a division of EY’s strategy and transactions business criticised bosses for a lack of transparency and for allegedly misleading comments about a recent redundancy round dubbed “Project Century”, according to an internal presentation seen by the Financial Times.
Some staff accused managers of using messaging that lacked transparency, saying they were told that jobs were not “currently” at risk before the cuts were announced.
One respondent said: “Trust is broken and as soon as the market improves I would [sic] jump ship.” Another said: “Still in shock, lack of transparency resulting in [a] lack of trust, the floor looks disconnected.”
Net revenues for deals are down about seven percent between the beginning of EY’s fiscal year in July and this past January compared to the year prior and gross margins have dropped almost 14 percent per FT per what they saw in the above-mentioned presentation. In the 12 months to EY’s FY23 year end in June 2023, deals revenues were up eight percent to approximately £635 million (~$811 million USD). Worldwide, EY’s consulting business saw 21.6% growth between 2022 and 2023 for $16.1 billion of the $45.5 billion global revenue take.
“This was an informal poll completed by 70 people, or 0.3 per cent of our UK workforce,” EY told FT. Oh, well, in that case NBD then.
We included a link to the FT story in the Monday Morning Accounting News Brief yesterday and received this note from a reader (hey, reader):
I was part of EY government practice till they laid me off last September because my EY partner lost the federal client. I’ve heard rumors about other EY government contracts. Low morale at EY is far beyond the EY strategy practice.
When PwC Canada sneakily laid off several dozen people last year we heard similar sentiment from an employee who watched their colleagues quietly disappear. “A coworker I knew very well was terminated from his position recently. However, there was no communication from the company regarding the situation or the rationale behind the let-go,” they wrote. “The rest of the team continued to act as if everything was normal. This left us uneasy, unsure of who might be affected next. It felt as though we were regarded as disposable resources, easily discarded during economic downturns.
“I must express that the Canadian PwC leadership lacks empathy and transparency in handling layoffs, especially when compared to many other prominent companies in Canada.”
The job market may suck right now and consultants may be reluctant to quit because of it but people remember being treated like this when things are bad.
