It’s not often we get to say Deloitte, EY, or PwC are following in KPMG’s footsteps but here we are. The phrase of the day is “global reorganization” and we should all be asking wtf is happening when two Big 4 firms are talking about doing it. In KPMG’s case, high level discussions are being had about merging together dozens of independent KPMG entities to “boost growth and prevent audit scandals” (per a FT source). In EY’s case, it appears the firm is planning to consolidate regions because business sucks.
Here’s what Australian Financial Review had to say about it:
EY will make sweeping changes to its global structure to cut costs and address stagnant growth, slashing the number of regional divisions and ending the independence of its financial services arm.
Under the restructure, EY will end three overarching geographic groupings and merge 18 regional structures into 10 so-called super regions. The financial services division will also lose its global independence and be folded into the new regions, according to multiple sources familiar with the plans who were not authorized to speak about internal firm operations.
According to what AFR was told, EY Australia’s home region of EY Oceania would be gone completely under this plan. EY’s three global regions of Americas, EMIA (Europe, Middle East, India and Africa), and Asia-Pacific (of which Oceania is currently a member) would be dissolved and affected partners potentially shuffled around. “[T]he restructure is likely to lead to further job cuts, including hundreds in the Asia-Pacific,” said AFR. Right. So partners get shuffled around, staff get shafted as usual.
In Bloomberg Tax‘s write up they say this huge reorganization is happening “to offer international clients more integrated services” and “to make it easier to offer clients cross-border services.” 👌
Anyone getting a really bad feeling about all of this?
This looks like “shuffling the deck chairs on the Titanic” to me.
As I once read of consultants, when one doesn’t know how to help a client, he says, “reorganize”.
How will E&Y get more clients no matter which E&Y unit signs the opinion, or does the tax work?
Nothing good will come to E&Y’s people from this.
Restructuring basically has two effects: 1. You cannot compare the prior year financial performance with current year performance as segments have changed. 2. Job cuts (rightsizing) for plebs
Big 4 firms – masters of horse $hit
I’m getting a very good feeling about this but then I don’t work for EY. The sooner we see the death of the Big 4 the better.
The low-information reader does not understand the consolidation discussion. Any firm must eliminate redundancies and trim back the excess fat. EY has a glutton of fat domestic and abroad that needs to be eliminated so the hard workers aren’t penalized, not to mention client fees.
Dude (Dudette?), yes EY has extraordinary amounts of fat, but don’t kid yourself that tripping it leads to hard workers not being penalized. Not only did the recent IT layoffs just mean more work for me, but my team lost two of my highest performers because they lived in the wrong countries (US and Singapore). And they worked plenty hard. But as one of them said, I’m done working hard to put another foot on a partner’s yacht. Don’t be naive, this is Big 4…either generate revenue or look over your shoulder.
Is EY just having a rough couple of years? It seems to be in the news a lot lately and can’t tell if this is just a continuation of the Project Everest “success” or maybe I’m biased and focused on news about this Big4 versus the others….
EY has the most toxic work culture…I know!
Wow. You have worked for all national firms and know this as a fact. Hot commodity you must be!
Which financial services are affected? The audit teams in EY that audits banks is doing a good job and not come up in any scandals so far only in terms of auditing. So the article that mentions financial services is not clear or specific about which particular teams. Providing that information would be helpful. By the way I don’t work for EY but I have been following closely about them in the news.