[Updated with additional information.]
Cherry Bekaert is the latest midtier public accounting firm to tighten its belt during these crazy and uncertain economic times caused by the coronavirus pandemic.
We were told that Managing Partner and CEO Michelle Thompson outlined staff pay cuts in an email this morning. The pay cuts will last through July.
Here’s the damage, according to a source:
- 5% for staff/seniors
- 10% for managers
- 12.5% for senior managers
- 15% for directors
While partner pay cuts were supposedly not mentioned in the email to staff, another source told us Cherry Bekaert partners have taken “deep reductions in draws prior to the staff pay cuts and are taking the brunt of the hit.” This person believes the draw reduction for partners has “got to be above 15%.”
Regarding the reaction to the pay cuts among CBers, one of our sources said:
General sentiment seems to be not a huge deal, especially if it is only 3 months. Everyone got a monthly stipend when this all started for home internet, so at staff level it’s fairly close to a wash with the pay reduction.
Our other source said it’s a much bigger deal for managers and directors, as well as employees in single income households who are already paying large insurance premiums.
A couple weeks ago, we got a few tips about layoffs at Cherry Bekaert, which we were told happened on April 14. They apparently were worse than we first thought, as one of our sources estimated that somewhere between 50 to 70 people were let go, mostly in audit and some non-core tax professionals.
It was drastic and cut a number of people who had been with the firm for a number of years. CB has never had mass layoffs like this even during the 2008 financial crisis. Layoffs in some markets were performance driven and some were not, but cuts had to be made which was tough, but understandable.
According to the firm’s profile on Vault.com, Richmond, VA-based Cherry Bekaert has roughly 1,030 employees. The firm is the 26th largest in the U.S. in terms of revenue, according to the latest ranking by INSIDE Public Accounting.
That’s all we know. If any CBers have more information to add about today’s pay cut announcement or the layoffs that occurred a couple weeks ago, send us an email or text using the contact info below.