Site icon Going Concern

Layoff Watch ’20: Apparently It’s Doomsday for Some at EY (UPDATE)

ey orlando

[Updated on Sept. 23 with additional information.]

EY management stuck to their narrative today that the recent layoffs at the firm aren’t layoffs but performance-based separations that were justified, even though many of those who have contacted us after losing their jobs said they weren’t on any type of performance improvement plan.

First, before EY U.S. Chair Kelly Grier led an all-hands webcast this afternoon, we were told by a source that John Short, Government and Public Sector partner at EY in Tysons, VA, said this during a call with about 200 people:

He could not stress enough that individuals are not being laid off, they’re being fired for poor performance and there’s no rule saying they need to be on a PIP. Whether people believe him is a whole other thing.

How can you tell someone you’re losing your job due to performance when you didn’t provide them with the opportunity to improve their performance via a PIP? What the hell’s the point of offering a tool like a PIP to employees if you don’t let your employees use it? I don’t get it.

During the webcast, Grier apparently called the definition of performance “relative,” according to a source, and showed a few slides with a bunch of stats about turnover at EY.

One slide seen by Going Concern called “Turnover: Definition and Historical Context” showed this data:

Voluntary: Historical average: 15%

Involuntary: Historical average: 2%

  • Conduct: very low numbers
  • Business changes/transformation: highly unusual
  • Performance based: comprise the majority of involuntary
  • Excess capacity/layoffs: highly unusual

17%: historical average annual turnover

<10%: COVID-19 period turnover

Another slide called “FY21 YTD Turnover and Actions” showed the following:

Voluntary: Averaging: 11.7%

Involuntary:

  • Consistent with historical average: 1.9%
  • Conduct: remains very low
  • Business changes/transformation: senior managers
  • Performance based: discussions occurring or nearly complete
  • Excess capacity/layoffs: measure of last resort

50% decline: FY20 performance based separations

30% decline: Total turnover during COVID-19 period

We were told that during the call, it was said that about 370 senior managers have been let go over the last month.

A source added:

Kelly said there’s typically about 1,000 individuals separated for performance in a given year. This year she says it’s about half of what it normally would be due to the moratorium put on performance based separations in the early days of COVID. All of those have now been resumed.

Kelly acknowledged that people are being let go for performance without them being on a PIP “in keeping with high performing culture.”

Again, what kind of great culture does EY really have if it’s not providing employees every opportunity to improve their performance?

The last slide we saw was called “Supporting Our Employees” and it said:

  • Support and resources through our EY Career Center and an outplacement service to help our people land outside the firm.
  • Access to EY Assist and the EY Personal Financial Planning Program to help them as they transition to new roles.
  • An additional $1,000 added to their severance pay to cover expenses like healthcare costs (COBRA) for performance separations.

Some EYers on the usual chatter sites said Kelly came off as sincere and direct during the all-hands call, while others called her “delusional,” said she looked nervous, and was talking bullshit. I don’t know, we didn’t see/hear it.

But those of you at EY who did watch the webcast, where do you stand on what Kelly said today about the performance-based separations layoffs?

[Updated on Sept. 22 with additional information.]

We’re hearing that there have been more tax layoffs at EY now that the Sept. 15 deadline has come and gone. One person who was a casualty of the most recent job cuts contacted us on Monday, and it was more of the same:

They waited until after the 9/15 deadline. Senior 3/Manager 1 and Senior Manager level in my group. My speech from my partner and HR was similar to what others have reported. Claimed to be performance related, but no pip and ratings on par with the rest of the group.

We’ll continue to update this article as we receive more information.

[Updated on Sept. 15 with additional information.]

Just when we thought the layoffs at EY were starting to die down, we heard from a few people late last week who were let go from the firm’s assurance practice.

A senior manager who had been with the firm for one year before being laid off on Sept. 10 told us:

I also know of a manager and a few seniors who were let go as well [on Sept. 10]. As a SM my severance package is for 3 months and $1k. That’s not a bad deal for someone earning $175k a year. The manager level severance package is for 1 month and $1k. The $1k is meant to cover the increased cost of COBRA coverage.

The way that EY went about this whole process is so unfair and sneaky. They categorized all of these separations as being performance based when in reality the people laid off did not have any performance issues. The cold hearted manner in which these layoffs have been conducted has left a lot of people feeling like they have been slapped in the face. It’s completely dishonest to classify these separations as being performance based.

A senior 3 in assurance who had been with EY for five years explains how (s)he was told they would no longer be an EY employee:

On Wednesday, September 9th, I was sent a calendar invite for a “Performance Discussion,” which was scheduled for September 10th. I had a call with my counselor at the end of August who discussed my year end feedback with me stating that my reviews are excellent, he spoke with my Senior Managers and they echoed how I was an invaluable member to the team and how much I had turned the morale of the team around compared to the previous year. I have always received extremely positive feedback and exceeded my peer group by a significant margin.

During the September 10th call I was greeted with a “this is going to be a difficult conversation, but the firm has performed an objective overview and determined that you are operating below your peer group.” I was told that effective today (September 10th) I would be terminated from the firm and was required to do the termination checklists, transition my team to take over my areas, and inform anyone else necessary. I was told I would be losing access to my computer at midnight, they would be sending a prepaid box to return my computer in the following week, and any further questions I had could be answered from my personal email with HR. No one on my team or the firm was told except for the partner on my current client who was informed only the night before (my counselor, who is also a partner, was not even told). I have worked on a notoriously challenging client in the office who has had some of the worst “rate my engagement” scores in the office (rate my engagement is an internal survey completed by employees who have worked > 40 hours on the client, which asks how the employees like the client, team environment, culture, executives, and various other engagement team related items). I called the partner of the engagement after my call with HR who told me he believed it was BS and that it’s a corporate decision made above him. I was then set to fully transition my knowledge, open tasks, and plans for year end to the brand new rising senior on the account.

I have never been on a performance improvement plan and have never had negative feedback in my career at EY.  It was never eluded to me that my position or status with the firm could be in jeopardy.

From reading the article I can most certainly confirm these layoffs seem to have no merit to being “performance” layoffs and it has confirmed that EY does not care about their people. I started my career at a smaller EY office where I began to believe that I was not just a number; however, transferring to a larger office quickly brought me to reality how small everyone is in the grand scheme and that everyone is replaceable at the firm.

This person said (s)he received four weeks of severance, two months of talent search help, and benefits continuing through the end of the month with $1,000 to be provided at the end of the month to help cover benefit needs. All vacation is also paid out.

Similar story for a person who worked in advisory (now EY Consulting) until Sept. 11. This person was told (s)he was being let go for performance reasons, but (s)he told us, “The work is just not there.”

This person added:

Today is my final day after exactly one year as a manager at EY. During my “Performance Discussion” the script that was read said that I was substantially below expectations for my grade. However I had not received any negative feedback, and had not yet even received ANY formal feedback at fiscal year end. Work is scarce due to COVID. We all know that this is the real reason for so many of us being let go. I could live with being given that explanation; but to blame me, citing my “performance” (which is not supported by facts) was totally disingenuous.

(S)he received four weeks of severance, plus $1,000.

We’ll continue to update this article as we receive more information.

[Updated on Sept. 9 with additional information.]

It’s been a little more than a week since we first were told about the stealth layoffs that went down at EY, and over the past seven days or so, we’ve heard from several other recently separated EYers who confirmed to us they were fired for performance even though they were not on a PIP and received no prior indication that their jobs were potentially on the line.

One senior manager, who was let go but is allowed to stay on until Dec. 31, told us: “I was told by my project partner that the layoff is not performance-related.”

A senior in SaT (strategy and transaction), whose last day with the firm was Sept. 8, told us: “I had no PIP, no warning. When I called my SMs and managers after to break the news, they were shocked, as was I. It’s frustrating to hear EY touting the ‘we aren’t doing layoffs’ but stealthily doing them. At least the severance package is nice but fml. Wonderful end to all the years of wrecking my health for a company that could less about their employees.”

About those severance packages—well, that’s something we really didn’t report on last week. The senior in SaT, who worked at EY for four years, received four weeks of severance. Another person, who worked at EY for three years and was about to become a senior 2, said “they’re giving me a month’s pay, plus another $1k.”

A third person said (s)he will be receiving severance but has “no clue” how much yet:

They indicated during the meeting I’d receive 2-4 weeks; however, I followed up with the HR rep afterward to confirm, and HR indicated it would depend. When I asked what the conditional criteria would be, the HR rep went offline.

And the EY senior manager whose last day is Dec. 31 said their severance situation is “a little bit complicated,” but here’s how this person said it works:

  • I am an EY employee with client responsibilities through December 31, 2020 at the latest. If I do not find another job before then I will continue to be paid my current salary. After December 31, 2020 I am on my own with no additional severance from EY.
  • If I find another job and leave EY before October 31, 2020, EY will pay me a lump sum equal to my salary from my date of departure through October 31.
  • If I find another job and leave EY between November 1, 2020 and December 31, 2020, EY will pay me nothing beyond what they will have already paid me.

If we find out any additional severance package information, we’ll update this post.

[Updated on Sept. 2 with additional information.]

On Monday evening we got a text on the tipline from an EY employee in New York who has kept us in the loop the past several months on all things black and yellow:

EY is stealthily laying off people. Three friends, who are seniors, got calls from partners today. They claimed it to be performance based. However, while those people who were not on PIP got fired, some people who are on the improvement program were not let go.

Yesterday, the chatter sites were all abuzz with posts about layoffs at EY. On Fishbowl, one poster claimed those being let go are “solid performers who are utilized,” and apparently multiple people posted on the EY Bowl (invite only) that they were being kicked to the curb.

Right now it looks like the alleged job cuts are affecting EYers who work in tax and risk.

More of the same on r/accounting, except one Redditor wrote that the EYers who are being impacted are “getting a phone call and told their last day is ‘x’ day.” Another Redditor commented that a couple people they know were told their last day would be Friday.

Now, this is all hearsay at this point. I emailed EY public relations for confirmation/comment and have yet to hear back from anyone.

Also we have yet to hear from anyone at EY who has actually confirmed that they are losing their job. And I haven’t seen anyone post on Fishbowl or r/accounting yet that they are being laid off.

So, if you’ve been told you have a meeting later this week with a partner and HR (or if you’ve had that uncomfortable chat with them already), please get in touch with us using the contact information below.

[UPDATE] We’ve been told that not only are the layoffs happening but they are not just contained to tax and risk. One EY employee not impacted by the job cuts told us:

It has moved to technology consulting as well. Seasoned veterans (not by age but by skill set) have been let go and not because their performance declined but because of favoritism towards a less performing individual. The performance review has been rigged to a point where those that didn’t meet expectations have been given a free pass and those who escalated it have received a ding.

Since we originally posted this article on Tuesday afternoon, we’ve heard from several individuals who have been impacted. One EYer, along with two other individuals in this person’s consulting area, was told their last day at EY would be this Friday.

I know 3 total including me. Senior and manager level. No PIPs. No warning of terms either.

EY needs to be called out on lying to public about terms. Promote 73 new partners then secretly lay off stating it’s for performance issues.

It just so happens that people were told they were losing their jobs on the same day that EY announced its new partner and executive director promotions. Nothing like rubbing salt into these people’s wounds.

Another person told us:

I got the termination notice last week. I am a very experienced senior manager (very close to promotion) with a very solid performance in my 9 years of EY career. It came as a shock to me.

What seems to be pissing off those impacted by the job cuts the most is the message that was sent by the firm’s leadership for the past several months—that there wouldn’t be layoffs, just the usual performance-based separations. But the people who have contacted us said their performance had never been an issue when speaking with their counselors or bosses.

One person told us:

I was let go last week along with at least two other colleagues. I am in tax. I was told it was performance but I get great feedback. I am definitely not on a PIP.

Another person told us that during their year-end counselor discussion/review about a month ago, (s)he received great feedback and would be promoted to senior manager.

However, on Tuesday, August 25th (i.e. only weeks after the promotion discussion), I received an unexpected request for a call from the same counselor with the subject line “Performance Discussion.” An HR representative was on the call as well.

The call was brief where the counselor told me, “This call is to inform you that the firm will be terminating your employment effective 9/8 for performance.” The HR representative then read me what I need to do as part of my separation and how any violations will have legal consequences.

I asked for an explanation as to how my performance changed from qualifying me for a promotion to resulting in my termination. The counselor indicated that he will reach out to me to schedule another call to discuss it. I have not heard from him since.

I reached out to another partner with whom I worked most of last year but he was not able to provide any additional details and told me how sorry he is that this is happening to me.

Since COVID-19 started, we were told by Kelly Grier (EY’s US Chair and Managing Partner) on the monthly calls that the firm has taken necessary steps to avoid layoffs and that performance based terminations will be delayed until September which I guess explains the framing of these terminations as performance based rather then layoffs.

But I worked inhumane hours to qualify for this promotion and was diagnosed with chronic fatigue as a result. So it was disheartening to receive this news and especially in the format it was delivered with zero compassion or appreciation.

We still haven’t received an official response yet from EY about the layoffs. But a person who emailed us claiming to have worked at EY since 2011 and who says (s)he has spent the past four years in various HR and enablement functions called the stories told to us by EYers impacted by the job cuts “baseless and inconsistent with EY’s termination process, at any rank.” (Italicized emphasis added by this person, not GC.)

For starters, an individual’s counselor or manager does not have the ability to fire (or lay off) anyone. All performance-related deficiencies must go through the Talent Consultants (HR organization) to ensure proper documentation and approval by General Counsel. There are many hurdles to terminating an employee for cause (firing) as well as to lay off (RIF/reduction in work force) which includes ample time for that individual to find another role on another team. I know this because I have hired some and I have had RIFs myself.

In addition, the “Feedback process being rigged” is also incorrect; each individual is responsible for selecting feedback providers; no one can provide feedback unless they are specifically invited to do so. If I select 10 of my peers as feedback providers to state I have done a great job, it does not mean that is correct. Partner/Executive Director feedback is critical. There are plenty of people with good feedback that are performing a mediocre job relative to their peer group. Case in point, a staff may be wonderful at scheduling meetings and doing expense reports, but that should not be their primary accolade.

Lastly – the fact that there are still Partner and Director promotions speaks to performance-related reward, which is still in place. A handful of seniors or managers could never offset enough budget for the 600+ global promotions that have occurred – it is mathematically impossible.

In short – this article is complete disinformation by a few disgruntled employees with no personal sense of accountability. If they were going to be laid off, that’s what it would be – a lay off. If they’re fired, it’s for cause.

This person also called Going Concern a “shitty rag” and a “garbage forum … where broken toys go to congregate and you don’t have a single credible writer, contributor, or viewing audience.”

Our feelings are now hurt.We’ll keep updating this article as we receive more information.

Latest Accounting Jobs--Apply Now: