[Updated with additional information.]
Rumor had it that the hammer would be dropped on hundreds of RSM US employees on April 21. We can confirm that layoffs did occur on Tuesday in multiple offices, we don’t know how many people in total lost their jobs (but it wasn’t the 300 that was rumored), and from what we’ve been told, the firm is claiming they were all performance-based reductions, not because the middle market—RSM’s bread and butter—is getting clobbered by the coronavirus pandemic.
Based on sources who have contacted us, RSM offices that were impacted by the job cuts include:
- New York City
- Schaumburg, IL
A few people who reached out to us Tuesday and Wednesday confirmed that the staff cuts were performance-related. One person said:
Can confirm the layoffs at RSM in the Private Client Services group were all performance based. They cut 6 associates/1st year seniors in our group of about 60, but the 6 were all known under-performers.
Another person said the two employees let go in their office “was 100% performance based.”
This is pretty common practice at the end of every [audit] busy season. Been with the firm 6 years and seen larger performance cuts in the past.
During a webcast on Tuesday, CEO Joe Adams outlined what actions the firm is/will be taking for the foreseeable future.
A source who heard the webcast told us:
It was announced that layoffs were performance based. Bonuses are still in place, but they may be deferred depending on cash flow. No mass layoffs in the short period, no pay cuts. No changes in partner distributions. Hiring suspended, internships will be virtual now.
Another source told us about the internships:
Summer internships and leadership programs will still be occurring, just virtually due to unknown restrictions based on group gatherings. All late summer trainings potentially may switch to virtual depending on government restrictions, asked not to book any travel arrangements.
From what we’ve been told, a date has not yet been set for when the virtual summer internships will happen.
We also heard from a couple people on Wednesday who told us that RSM partners are taking a decrease in expected earnings.
One source said:
Partners have taken 8-10% decrease in expected earnings for FY20 and prepared to take on more for FY21 to minimize impact to staff.
This doesn’t necessarily sound like partner pay cuts, but instead expected income compared to plan. For March and first half of April, we were still better than last year, but behind plan.
It sucks people lost their jobs yesterday at RSM. But at least the firm didn’t go all Crowe-like on its employees. Sounds like it could have been much worse.
One current RSM employee told us:
All in all, the firm has done a solid job at communicating with employees. Regular updates are posted on the RSM intranet.
But another person told us that the firm has “made a point of communicating very little to those they laid off.”
They simply said, without offering any specifics, that it was performance-based. It seems they needed to make cuts due to what’s going on, but strategically decided to make it appear that it was officially because of performance. Anyone with anything negative in their feedback this year or last were vulnerable, while RSM gets to protect themselves and their public image. Very shady.
That’s all we know for now. If anyone else can fill us in on other things Adams talked about during the webcast, get in touch with us by email or text using the contact info below.