[Updated with additional information.]
In the past 48 hours, we’ve learned that hundreds of people were laid off at Crowe this week and many others were let go at Baker Tilly.
Here’s what we’ve been able to piece together about the layoffs at both firms based on tips that have come in to GC:
What started out as minimal layoffs to some employees in tax on Tuesday turned into full-blown carnage on Thursday, as we learned from sources that between 300 and 400 people lost their jobs this week at Crowe, the ninth largest accounting firm in the U.S., and unfortunately more might be forthcoming.
Percentage-wise, we heard it was 5% to 10% of the firm’s employees who were let go. According to Vault, Crowe most recently had a total of 4,267 employees.
We got a tip on Thursday morning that said:
Today is D-day at Crowe for layoffs.
The layoffs seemed to impact all service lines, in some way, shape, or form. One source told us on Thursday afternoon:
It depended on the group the employee was in, productivity of the employee and group, some groups no one was laid off other groups it was 5%.
CEO Jim Powers made a firm-wide announcement at 4 p.m. ET Thursday afternoon to discuss the layoffs, we were told.
According to one source, here are some other cost-cutting measures that are happening at Crowe:
- Partners took a 15% pay cut.
- Officers took a 10% pay cut.
- No pay cuts for employees who remain at Crowe; however, there will be no bonuses this year and no annual salary increase.
- Like PwC and EY, Crowe is moving its summer internship online. The firm’s virtual summer internship will be held from June 1-30.
We also got a clarification from a source about 401(k) matching at Crowe. We were told this:
We have two portions, the normal company match and then an additional “age-based” amount. The firm is not contributing the age-based portion, they are however continuing with the 2.5% maximum match.
This source also told us that an “across-the-board employee pay cut is in the works.”
Things started happening at Crowe on April 14, when some Crowe tax professionals in the Midwest were let go. One person confirmed in a Reddit post that they were laid off from Crowe on Tuesday.
Then there was this comment made in a post on Fishbowl on Tuesday:
We got a tip Wednesday night that the layoffs on Tuesday impacted staff in Crowe’s federal tax practice. That person told us, “Number [of layoffs] not known. Radio silence from leadership.”
Early on Thursday morning, we started receiving tips that layoffs were going down in Florida. We were told from one tipster that multiple senior managers, managers, and third-year staff were being laid off at the firm’s offices in Fort Lauderdale and Miami.
Our tipster continued:
The people I knew well were high performers and Crowe lifers since college.
Shocked at the people picked in SoFla. These were high quality people who lead their industries.
We were also told on Thursday afternoon that there were layoffs in advisory at Crowe’s New York City office. One senior manager who was let go from Crowe’s advisory group in NYC told us:
I had been there since July and had just returned from maternity leave last week.
After I came back from maternity early April, they gave me a ton of “important practice development” work (pushing me to get it done asap), then this morning my boss calls to fire me and tell me it is also my last day. They immediately disconnected my Skype/Crowe network so I couldn’t communicate with anyone and I got the severance package within the hour.
The severance is: a month’s pay and health insurance until the end of April (then Cobra kicks in).
Several people who have contacted us since Thursday afternoon are extremely pissed at the way Crowe management handled the layoffs, including some who still work at the firm.
One person told us on Friday:
Everything began March 20th, when several people were put in firm paid leave until May 15th. They had a meeting with internal client facing personnel stating changes and that they would do everything they could to find alternate work/tasks for individuals that had skill sets to do so. Then less than 24 hours later the calls came putting people on leave deeming them “non-essential.” Leaving doubts that any efforts were made to find alternate placements to keep people employed.
Then the day after Tax Day, a blood bath occurred laying off 300-400 employees. Those that were on Firm Paid leave until May 15th have not heard anything regarding their final terms. Nobody in Firm paid leave has been asked to sign anything either. Yet all access to everything Crowe was cut immediately and has been since. The individuals they have kept range from catering/meeting personnel to multiple “front desk” personnel which does not seem essential during this time, yet hardworking Crowe “lifers” who have given their all have been termed and given a 1 month “thanks for all you did” severance. Absolutely sickening.
Upper management is where the cuts should have been targeted. Multiple personnel doing the same job or simply delegating.
Another person told us:
No one knew the layoffs were even being discussed. I guess maybe we should have assumed, but everything that I had heard from partners and senior managers sounded like things were moving along at the same steady pace as always, aside from now working from home. I know personally, none of the jobs I have been assigned have changed or been canceled since this all started.
A girl in my office was let go (a senior, with the firm 3 years) and the partner she works closest with didn’t know she was one of those being cut until Wednesday (the office managing partner knew further in advance). Around 4:00 Wednesday they put the meeting on her schedule and then the partners promptly logged offline or went “away” because she started asking questions about the purpose of the meeting. Then at 9 a.m. Thursday morning she was let go via Zoom meeting.
Based on conversations with various seniors, managers, and one partner, the cuts were both performance based and industry specialty based, and it was hinted that is was also due to her not actively pursuing her CPA license. Other seniors that I know who were let go also do not yet have their CPA license, so that may be a larger factor. Those of us remaining spent the entire day messaging each other in panic because Jim Powers did not address the cuts or the firm’s plan until 4 that afternoon.
The last communication we received from higher ups in the firm regarding how things were being handled was WEEKS ago. So not only was everyone blindsided by the cuts, but we were left to panic for hours not knowing if we were next or what the firm’s rationale or plan even was. And in his video, Jim Powers mentioned that future salary cuts across the board and potentially more staffing cuts could be coming in the future since so much is still unknown.
I will just end this by saying I thought so much more of my firm before today. This was handled so poorly.
This is how the ninth-most prestigious accounting firm in the U.S. treats its employees. Oh right, and the 81st best company to work for, according to Fortune.
Baker Tilly is the eighth-most prestigious accounting firm in the U.S., and they haven’t handled things much better than Crowe. We’ve heard from a couple of people this week who said the layoffs were performance-based and that low performers are typically let go from the firm each year before the end of its fiscal year in May. But a couple of people who lost their jobs call bullshit that they were laid off due to performance.
A source told us on Friday that partners took 20% to 30% pay cuts to prevent any salary cuts to staff. This person told us that the firm says the reason people were let go was due to performance.
I know firsthand that the people in my office and neighboring offices were under-performing and there had already been talk about end of fiscal year separation. COVID simply accelerated what was going to happen anyway.
Practice leaders were directly invoked in the decisions and it came down to performance reviews and not forced cuts. Firm says it wants to keep performers and it looks like they’re doing just that.
We started hearing about layoffs happening at Baker Tilly on Wednesday afternoon after we received an email from someone who lost their job and was given a month severance.
This person told us that two weeks ago the firm announced partners were taking “substantial” pay cuts in an effort to keep staff employed.
I was guessing I had more time than that. It certainly was shocking today.
I volunteered to take a pay cut, move to a different practice area and even relocate on my dime to save my job but they wouldn’t even consider it. I was the most recent hire in my group (December 2019) so I guess that is why it happened so quickly.
I know other team members in our group were being moved around to other practice areas to preserve their jobs for the time being.
This ex-BTer also said they don’t believe for a minute that their layoff was performance-based.
I was specifically told it was related to the virus and economic crisis. I was not even at BT long enough to have a review and I never received anything but compliments on the value I brought to the firm. To be fair I wasn’t charging a ton of hours but had been tasked with New Business Development and that had been my main focus.
Another person who was laid off from Baker Tilly on Wednesday told us that employees were notified that performance-based layoffs were on the table, but this person also believes the layoffs had more to do with COVID-19 than performance.
I can confirm that partners took a pay cut. And my local office three weeks ago told us the firm was not planning layoffs anytime soon.
It came out of left field. Senior managers in my office were not consulted, said they did not know anything about it.
We were also told this week that roughly 20 people were laid off between the New York City and Melville, NY offices of Baker Tilly, and another person contacted us to say that seven people were laid off from the firm’s financial services team.
We still don’t know exactly how many people at Baker Tilly lost their jobs this week, but the source who contacted us on Friday said it was about 3% of his office in the Midwest and “it wasn’t service line proportional.”
I’ve talked to friends in other offices, and one was more like 5% and another was just one person. So no across the board hit.
But with that said, CEO said on this morning’s regularly scheduled all-hands call that future actions are being considered if they become necessary — he said everything that other firms are doing is on the table. Layoffs, furloughs, pay cuts … but said nothing is happening for now. My partner (who I really trust) said that he heard the same on partner calls. Everything is on the table but nothing is contemplated in the near term.
Chicago-based Baker Tilly is the 11th largest accounting firm in the U.S., according to INSIDE Public Accounting.