Happy Friday, everyone! Hopefully you all made it through this week unscathed and still have your job. Unfortunately for some employees of Grant Thornton, they can’t say the same.
We received this tip a little bit ago:
Looks like GT will be cutting some advisory people and furloughing new hires and cutting some executive assistants. Seems to be about 1.5% of the total workforce.
That was followed almost immediately by:
Grant Thornton (US): furloughing some recent new hires where market demand has fallen significantly, eliminating a small number of internal roles, and downsizing the Workplace Solutions team (including some executive assistants)
And we must tip our cap to the person at the Purple Rose of Chicago who provided us with the message CEO Brad Preber sent to GTers this morning. I’ve bolded the part pertaining to the layoffs:
To my teammates,
As the COVID-19 global pandemic continues to grow, we are continuing our work to balance our three Purple Chips:
- To take care of our people
- To be there for our clients and
- To keep our business strong
As you’ve heard me say before, all three of these priorities are interconnected. We can’t focus on just one priority at any given time – we have to always keep them in balance, even when it seems as though they are in conflict with one another. This is how we must proceed in the work we are doing together to continue to serve our clients with quality and excellence and become the most admired firm in our profession.
A key part of keeping our business strong is continuing to monitor impacts of the pandemic and resulting economic recession on our business – impacts we can see today, and that we can see taking shape for the fiscal year to come.
The overall picture is filled with uncertainty, but some trends are clear. Revenues have declined in a few business units in Advisory due to contracting demand in the market. Billing and collections have slowed across the firm as clients’ businesses are impacted by the slowing economy. Voluntary attrition is down dramatically as the job market contracts, creating unsustainable overcapacity in several areas of the firm. Finally, as we move intentionally to achieve a more competitive cost to deliver, we expected changes in our business would result.
In light of these trends and actions we’ve been taking to become more competitive, we are making small adjustments to our staffing levels in a few specific areas of the firm:
- We are reducing the size of some teams across Advisory Services, including putting some of our recent new hires on furlough, where market demand has fallen off significantly;
- We are eliminating a small number of ICS roles where organizational changes will enable us to better align to our business priorities; and
- We are downsizing our Workplace Solutions team, including some executive assistants, as the scope of the business need for these roles has changed.
Consistent with our culture of caring, we are providing these teammates a package of severance pay and benefits to help ease the transition to their next professional opportunity.
When the COVID-19 crisis first hit, we took a number of steps to balance the needs of our people, our clients and our business. In April, we reduced partner/principal draw payments, asked the owners of the business to contribute to a capital call to strengthen our balance sheet and asked managing directors on the leadership team to take a temporary pay cut. In May, we decided to eliminate merit salary increases and annual bonuses for all employees as a way to maintain financial strength while keeping job reductions to a minimum.
This week’s decisions are difficult, but represent changes that will help keep our firm strong in FY21 so we can continue to balance all our goals for our people, clients and business going forward. We’ve scheduled a short firmwide all hands call this coming Monday, where I’ll discuss these decisions a bit more, and everyone in the firm will have an opportunity to ask questions. I’ll hope you’ll make time to join.
For my video this week, I spoke with Sam Shaw, our chief financial officer, about some of the trends we’re seeing in the market and our business results that led to these decisions. I hope you’ll take a moment to watch.
Thanks again for all you continue to do for our firm. Have a safe and restful weekend.
GT’s fiscal year ends a week from today, but as I’ve mentioned on this site before, FY 2020 global (and U.S.) revenues for the Big 4, GT, BDO, RSM, and the like probably won’t be impacted too badly by the COVID-19 pandemic because business was plentiful per usual for most of the year until March when firms started sending everyone home to work and the economy started tanking and work dried up, especially in advisory and consulting. It’s FY 2021 revenues that will be a real shitshow. We saw it in 2009, following the global financial crisis. Deloitte’s global revenue fell about 5% from 2008, EY’s dropped nearly 13% from 2008, and KPMG’s decreased 11% from 2008. PwC was the only Big 4 firm with a slight year-over-year increase, at 0.30%.
I wasn’t able to find Grant Thornton’s global revenues for 2008 and 2009 but I suspect 2009’s wasn’t any good either. I have a feeling we’re going to see some very sobering revenue results next year across the board.
Before today’s layoffs, we had heard about some underperformers being shown the door at Grant Thornton in early May. Hopefully there won’t be any more GTers losing their jobs anytime soon.
Good luck to all those affected by today’s layoffs.
Grant Thornton Reducing Partner Draws By 25% For the Rest of FY 2020
Layoff Watch ’20: What’s This About Grant Thornton ‘Optimizing’ Some People?
Grant Thornton to Staff: ‘Don’t Expect Raises or Bonuses This Year, Sry’