Charlie Gasparino is reporting that the SEC probe in the Lehman Brothers bankruptcy is “ramping up” and that the Commission is under hella-pressure to bring civil charges against Dick Fuld, Ernst & Young and whoever else is on the list.
It’s unclear if the SEC can muster the necessary proof to show that top executives like former CEO Richard Fuld or the firm’s outside auditor Ernst & Young intentionally misled investors about the health of Lehman’s balance sheet in the months before it filed for bankruptcy in mid-September 2008, according to people close to the probe…It’s unclear when any charges might be filed by the SEC, but people close to the inquiry say the SEC believes it does bring one, it must do so “very soon,” possibly within a few months given a combination of the outrage over the report’s findings and that Lehman’s bankruptcy is going on two years old.
Okay, so things are urgent but not that urgent. It’ll be Father’s Day maybe the 4th of July by the time we get a Mary Schapiro smackdown.
But that’s not all! Things are really serious at Ernst & Young now because Charlie reports that E&Y “has hired high-profile white-collar attorney William McLucas as its outside counsel in the matter, people close to the firm say. McLucas had been the SEC’s enforcement chief before entering private practice.” We checked with our friends over at ATL and it turns out that Mr McLucas is a partner at high-powered WilmerHale and was lead counsel to the special committee of the Enron Board that reported “hard-hitting findings” (sayeth he).
Since Mr McLucas doesn’t take shit from the likes of short-seller Jim Chanos, we’ll take Charlie’s word that things are pretty serious over at 5 Times Square.
E&Y spokesman Charlie Perkins declined to comment.
In the past week or so, merit increases have been communicated or reiterated by three of the Big 4. While the news of the resurrected raises is widespread, most people we’ve talked to (and commenters) are not believers. Most see it as a preventive measure to delay the exodus (or at least keep it within expected ranges).
Since the rest of the Big 4 have already been covered (KPMG, E&Y, PwC) we decided to get proactive on finding out the scoop on Deloitte. We contacted a reliable source and it turns out there may be some communication very soon:
[S]o far nothing. I’m going to an all-hands meeting tomorrow in NYC, so maybe they’ll mention something there. For now, all that I can really say is that there’s whole big bunch of people waiting to jump ship, pending the results of this year’s comp, so they better put some serious increases in…
So it’s safe to presume that if the Deloitte brass doesn’t communicate a satisfactory message, the streets may be flooded with Green Dots. If you’ve gotten guarantees, denials, or anything that remotely resembles an official word on this year’s Deloitte comp, get in touch.
We’ll be posting on a lighter schedule today. Hopefully many of you are enjoying a long weekend.
• Dell says several former staff may face SEC action [Reuters]
Some former Dell employees are facing possible SEC actions related to the company’s accounting. The Commission started its inquiry back in 2005 and Dell disclosed that the U.S. Attorney for the Southern District of New York had subpoenaed documents shortly after in 2006. This all led to the Accounting Code of Conduct that the Company implemented last fall. The company stated that it believes ‘monetary penalties’ will be part of the settlement but otherwise they’re keeping a lid on it.
• FASB Chairman Robert H. Herz and IASB Chairman Sir David Tweedie to Discuss Global Accounting Issues at The George Washington University [FASB]
Herz and Tweeds will be at G Dubs on Wednesday, April 7th kicking around global accounting issues. “Greater Global Transparency in Financial Reporting: Lighting the Path for Investors” starts at 6 pm and is free and open to the public, so you best get there early before the groupies overrun the joint.
• NASBA Takes Back (Some) Passing CPA Exam Scores for March [JDA]
In what could amount to the worst April Fool’s joke in history, Adrienne is reporting over at JDA that NASBA is taking back some of the scores for March after extending the test dates in the third month:
[F]rom a reliable source within the Big 87654 that test-takers outside of the blizzard-affected areas have actually gotten their scores taken away and thrown out. Yes, that means all of you who put it off until the very last minute and rescheduled for the March extension are pretty much screwed unless you also got snowed in on top of it. Yes, those of you who paid for and passed the exam in March.
Huh. We’re checking into this. We’ll get back to you if we learn more.
A little more from inside E&Y to round out the week. We got a tip earlier in the week that there was an oddly-timed town hall going on in Chicago this week. Our tipster indicated that the meetings usually occur after the June 30 year-end or in September.
We asked around and from the sounds of it, the meeting amounted to an extremely sober pep rally. The need for a little HR cheerleading is completely understandable, considering the month E&Y has had.
“[T]hey just talked about how they know morale is down, yet no plans for how to fix it. Additionally, they said there would be raises this year, but no mention of how large or small…[and] your basic HR ‘Thank’s for your help’ stuff.”
We haven’t heard the details for the cause “low morale” but it’s quite possible that it could be due, at least in part, to the ehmanlay rothersbay uckshowfay. Plus, busy season is in the home stretch and most people are just over it at this point. As far as fix for morale, our suggestions of Canadidan Tuxes, Timberlands and Hitler videos are obviously being ignored with extreme prejudice. We’re all out of suggestions. Maybe they aren’t the best ideas but at least we’re trying.
The silver lining here is that comp increases are still on the agenda after the initial announcement made by Steve Howe back in January. If they go back on this promise — we’re confident they won’t — you can just blame it on Dick Fuld.
There’s been some whispering about PwC moving up its compensation and adjustment time frame from September to July and that’s got people curious.
At first glance this makes sense because the firm has a June 30 fiscal year-end. PLUS! Since Bob Moritz has already made it abundantly clear that there will be raises for 2010 we figure everyone would be excited to hear that the bumps would be coming a little earlier this year.
However, since everyone likes to jump to conclusions over the slightest little change, we’ll indulge. There have already been whispers of layoffs at PwC here and there but nothing that we’ve been able to confirm so people are probably antsy. And if the adjustment date is moved up we’re sure people are worried that means layoffs will be happening sooner rather than later. We can’t read anyone’s mind but we’re thinking this should be in the ballpark…
But if you’re anxiety is well founded, tell us why or get in touch.
UPDATE, a shade before 1 pm: One of our sources inside PwC shared their thoughts with us:
I think the overall feeling was positive…it will probably make some people happy (depending on the %) and hopefully limit the higher performers from going out into the market, however, it may also help some people look for jobs sooner (i.e. they don’t have to wait until September now, if the raises are low). Most people still have a lot of questions, including the estimate of the increase for each band of the rating system, what the bonus pool is going to look like, and although that is not being paid until September, whether we will know what the bonus amounts are in July.
From an upset Ernster on the Left Coast:
EY Blocks all Websites with “sports” because of March Madness. People in my SoCal office are all ticked off. This sucks. First it was pandora and now it is sports websites. What is next? Lunch breaks? Bathroom breaks?
Music, sports, food, bodily functions. That seems like the right order, doesn’t it?
Since our source sounds pretty upset, this must not be an annual ritual for E&Y. It’s also not clear if this some kind of punishment for everyone showing up hungover today or if it is somehow Lehman Brothers related. Let us know if you’re blacked out at we’ll send you updates.
UPDATE, 6:43 pm: Turns out this was just temporary, THANK GOD:
It turns out there was an internal webcast about Lehman Bros so they shut down all sports websites during the webcast because it was interferring with the webcast. Sports websites are back up but there were a lot of people who were ticked off and went home to work.
Damn you Lehman Brothers! We knew it! So now the question is, what was said on the webcast? Anyone take copious notes?
If you’ve ever worked at a Big 4 firm, you’re aware that when big news hits the MSM, A) it’s never good and B) there is typically some sort of communication from management reiterating the firm’s position on the matter, everything is cool, thanks for your hard work, etc. etc.
With last week’s revelation of the bankruptcy examiner’s report on Lehman Brothers, E&Y seems to be following this protocol as it relates to the troops on the ground. As you would expect, leadership is keeping their heads about this while in the background in-house counsel is likely engaged in all-night smoky room strategy sessions.
We checked in with a few of our Ernst & Young sources to get an idea of what people were thinking and so far, there doesn’t sound like there are any signs of panic (yet!).
From one source:
Overall reaction from what I gathered is pretty muted. We did get a call from some of the higher-ups saying that we reviewed our work and that we feel that our audit was completely adequate and that Lehman’s failure was nothing more than the same systemic failure of two of the other major banks and that we plan to defend ourselves vigorously. Presumably, the examiner’s report really didn’t give any ah-ha moments….
[I]s there a possibility of a payout at some point? It’s possible. Are we worried that we’re the next Arthur Andersen? I don’t think so.
So at least on the surface, E&Y leadership is communicating that what came out in the report wasn’t surprising and that the defense of the firm’s position will be, as usual, vigorous.
That doesn’t of course stop the speculation:
I heard from a technical guy there was some concern because they didn’t issue a going concern opinion [for the previous audit].
And as you might expect, “I heard that [the firm] helped cook the books and is deep shit,” with the book cooking being arguable but pretty hard to prove and the “deep shit” aspect being a given.
Some Ernst & Young partners are probably losing sleep just thinking about the potential liability involved here but eventually they’ll get over it (until something else comes up).
No partner worth their salt got admitted to the partnership focusing on the downside. The problem is that when people use consistently use words like “deceptive” and “misleading” to describe Lehman’s accounting this reflects poorly on the firm since they were comfortable with the treatment.
And because it’s still busy season for a lot of people, they are focused on the shitstorm that currently surrounds them, not one that will likely drag on for years after they’ve left the firm (voluntarily or otherwise).
Anyone with more insight or thoughts on the matter, get in touch with us and we’ll keep you updated on the chatter inside E&Y.
We heard a rumor today that PwC is currently renegotiating their cell phone contract because, yes, they underestimated the amount of texting that would be done by employees on work phones. Foiled by Gen-Y again!
We realize it’s hard to believe that the numero uno Trainer would somehow not educate its people to avoid sending hundreds of sexually explicit messages to the person in the next row when they simply could have pull together some instructions on cubicle sex. This would have alleviated at least some of the problem.
Well it’s too late now, you randy fools. You’ve no doubt cost the firm millions in charges because you couldn’t compose yourselves.
On the other hand, who were the geniuses sitting around 300 Mad trying to figure out what the texting plan was right for P. Dubs? We know Bob Mortiz wasn’t in on it. Did they consider the fact that PwC employees might be a bunch of savages that would be spending every waking hour sending photos and dirty limericks to their spouses and FWBs?
We understand that firms are trying to save money these days but jesus, it’s common sense to spring for the unlimited texting plan.
UPDATE, Friday, Feb. 12th: We heard back from a source who shared this:
I think they give us something like 100 a month (not positive) which doesn’t affect me, but some people in my office laugh about how much they go over.
Let’s say it is 100 a month. Depending on your prowess, one sexting encounter could conceivably use up a whole month. Someone tell PwC Ops (or whoever is in charge of these things) to go for the unlimited plan.
We’ve received multiple tips informing us that Grant Thornton’s Greensboro, North Carolina office will be closing in the spring after busy season has ended.
Greensboro has approximately 35 professionals in all three service lines although our sources indicate that many tax professionals were laid off late last year in anticipation of the closure. Greensboro currently functions as a satellite of the Charlotte office which houses the support professionals.
What’s not known at this time is whether the office will become virtual, similar to the setup that Ernst & Young arranged for its Greensboro office other whether it will be an outright closure.
We contacted Grant Thornton for comment and had not heard back from them at the time of this posting.
If you’re familiar with the situation in Greensboro and have more information, get in touch with us. We’ll continue to keep you updated as we learn more.
If you ever get an interview at Marcum, we suggest you break out whatever textbooks you have left, find some stimulants and cram the night before:
[My friend] had some crazy ancient partner interview her and he was talking to her and asked what her favorite grad class was and she told him one…so he wrote down 3 problems gave her code sections etc. and said i’ll be back in an hour and walked out and she was left there alone to solve them. He came back in and said i give this a B+ and then they offered her a position.
Or you could just ask the Accountant of the Decade to develop a new review course.
Confused doesn’t even begin to describe what were feeling. We are hearing tons of rumors about layoffs in the Ernstiverse this week.
We’ve heard rumors from Denver to the East-Central (fka North-Central) and New York FSO. This includes both client serving professionals and support staff. We have already confirmed that two admins were let go earlier this week in New York.
The timing is especially strange since, you know, it’s January and in some offices the mandatory hours have already rolled out. Even if it were only support staff being let go, the timing is still unheard of. Why wait until January to let people go when having cuts in November? Maybe it’s just us but if we had survived that November cut, we would have thought that our job would be safe until at least the spring.
And since the roundtables seem to be SOP you wouldn’t think they would be anything to worry about but they definitely have people talking and wondering what will go down.
So far, Ernst & Young has not responded to our request for comment.
If you hear anything about your office get in touch in with us and discuss in the comments.
Back in November, we introduced you to Punit Renjen, the new Chairman and CEO of Deloitte Consulting. Based on his statements at the time, PR sounded pretty stoked about leading D Con and making sure the firm remains on any “Best Places to Work” list .
But since P. Ren took the helm, there has b speculation on the Deloitte forum Greendotlife about laid off Americans in favor of Indians on H-1B visas.
As you might expect, it’s a pretty ugly conversation:
Deloitte Consulting under the leadership of Punit Renjen has completely lost its moral compass. This man has put profits ahead of the American workers. He has shown his deliberate willingness to sabotage the dreams of many American young men and women who are able and hard working. Sacking highly qualified Americans and then replacing them with cheap less qualified foreigners is morally wrong and Un-American. That is the Punit paradigm.
Let’s be serious here- do we really want to outsource the strategy ops/ human capital work to a bunch of foreigners? It makes sense to give them the behind the scenes job such as programming, testing, payroll, etc.
And a response:
WHAT? “Lost his moral compass”?? Firstly, his job is to maximize partner profits. He is legally allowed to fire Americans, in America, and bring in foreigners to replace them. If he didn’t do it, someone else would. Competitors such as IBM, Accenture etc. cartainly do this all the time.
And this is the tame stuff. It would be easy for us to say that this is typical American xenophobia but if enough people are complaining about it, does that make it a problem for Deloitte leadership? As another comment attests:
It seems there is much concern amongst posters on this thread that Indians are replacing American workers in an American firm in the USA because they are cheaper and because the senior leadership wants to “celebrate diversity”.
Looking at the number of posts and the level of passion exhibited, this is a real issue for many people, so stop trying to shut down the conversation. People are concerned about this. And don’t start bleating “racist” like a sheep.
Deloitte certainly likes making their diversity efforts known but it would difficult (if not impossible) for anyone to prove that this is the firm’s approach at promoting diversity.
Further — as much as Lou Dobbs hates it — if Deloitte is replacing Americans with Indians, it’s perfectly legal and there’s nothing anyone can do about it. The whole thing is moot anyway, as a lawyer friend told us that the H-1B quota has already been met for 2010.
We reached out to a Deloitte spokesperson who said that the firm would not comment on individual opinions from the forum.
Wanting some additional perspective, we asked some of our sources at Deloitte for their opinions on the discussion:
[F]rom looking at what’s going on in my group and region, I would tend to conclude the opposite. The vast majority of people who got got axed were on H1B and Senior Managers were often heard talking about how it’s hard to justify (to who I’m not sure) hiring non-American when there’s such a glut of American capacity; and I doubt that the hiring/firing strategies would differ so drastically.
Another source was not only skeptical but told us that maybe people should be more concerned about their clients:
[Many] seemed to be paranoid about losing their jobs to someone in Hyderabad. I think that their fears are overblown. I was always more concerned about my client going bankrupt or us being replaced…than I was some guy on the other side of the world taking my job.
So what exactly is going on here? You’ve got a forum full of angry Deloitte employees claiming that jobs are disappearing for the sake of diversity and cutting costs but is there anything to it? Aren’t we witnessing an international company making business decisions? If you’ve got additional thoughts and insights, get in touch with us and discuss below.
Last month we told you about the E&Y Greensboro office shutting its doors to become a “virtual office”. All the client-serving professionals (around 60) are now reporting and being serviced out of the Raleigh office.
This followed the closure of the Manchester office that we reported on in October and that became official in November. In this particular case, there was no merging of sites and client service professionals (non-partners) were let go.
The latest speculation is that there are several small offices that are at risk of going virtual as opposed to out-right closing post busy season, using the Greensboro office as the model. Offices that are being serviced by nearby larger offices are of greatest risk as well as small offices that have a dwindling client base.
Although the virtual office seems to be the most warm and fuzzy of the two options, there would certainly be layoffs of support staff and service professionals that weren’t interested in working from an office that was a considerable distance from where they lived.
Whether or not this strategy will be utilized by other Big 4 firms is not clear but this story will continue to develop as busy season progresses. If you hear rumors about your office get in touch with us. We’ll keep you updated as we learn more.
Or something like that. Guest 28 put it out there that Sue Sachdeva was flipping those designer threads to fellow employees for low low prices.
On the one hand, maybe the two employees on leave that worked for Suze were the bargain shoppers. On the other, how hard up for extra money was this woman? Maybe she just wore it out once with the tags on and said “I don’t love it”? Can anyone in the Milwaukee area that hasn’t already gone to happy hour confirm this? Get on the horn.
We’ve got a follow up to our post yesterday about E&Y’s restructuring plans for the North Central and Pacific regions.
A source has informed us that the Financial Services Office (“FSO”) began nationalizing non-audit banking and asset management clients earlier this year. Insurance clients are also going to be under FSO, which will centralize all non-audit financial services clients. Our source has further indicated that the next step is to nationalize the audit clients. The ulitmate goal is to slim the firm down to five total regions (West, Central, Southeast, Northeast, and FSO).
We asked a couple of sources about this particular rumor to get some opinions:
I do hope this is not true, as [FSO] can’t audit their way out of a paper bag. I’m not sure why they would make an interim step as they’re making now if there’s an ultimate goal of five sub-areas
Running FSO out of NYC seems like a good call from an overhead…cost standpoint but that’s about it. I have heard horror stories about the kind of hours FSO staff typically pull year round. I don’t see this making the “people in the trenches” any happier. Having all the work routed to one place makes it easier…to make sure that work is getting done…Of course I think this is just going to turn FSO into more of a meat grinder than it already is since they are going to do everything they can to get as much work in the pipeline as possible to keep that group busy.
As we mentioned yesterday, E&Y would not comment on internal firm matters.
If you’re in the FSO practice and can attest or refute any of the above details (horror stories, meat grinders, auditing out of paper bags) or even if you’re not and have an opinion share your thoughts below.
Earlier this month we told you about layoffs that went down at Crowe Horwath in late November.
We’ve now received additional details that indicate that Crowe has had several rounds of layoffs this past year that started with non-client serving personnel late in 2008 and culminating with the November round.
Our source told us that the second round occurred in spring of this year and at that time, firm leadership communicated that no further layoffs would be necessary. Apparently things didn’t goes as plan as a third round occurred in July that consisted of professionals in the risk consulting practice and many in the Financial Institutions practice that were not chargeable were asked to take sabbaticals. This report of “sabbaticals” is consistent with our report earlier from a source that indicated that “there was a lot of forced time off during the summer.”
It sounds as though Crowe has consistently notified their employees about the layoffs, although our sources have indicated that details (i.e. number of professionals) are always scarce for “morale purposes.” One could assume that since anything after the spring round was not supposed to happen, morale was probably all but wiped out anyway.
The second and third rounds were rumored to be in the nabe of 150 each and our source told us that the third round included many “Executives, Senior Managers, and Managers over 40.” and that “Agreeing to not sue Crowe for age discrimination was part of the Severance Package.” So if you’re 40+ at Crowe it sounds like your best years are behind you or maybe you’re just too damn expensive?
Middle-aged dismissal rumors notwithstanding, Crowe has seen its own exodus, which seems to be the natural progression of things when layoffs reach bodily function regularity.
Crowe Horwath has not responded to our repeated requests for comment.
If you’ve been involved in any of these layoffs at Crowe, or have additional details discuss below, or email us and we’ll continue to keep you updated.
That’s what we’re hearing! A source has informed us that TF is in the Garden State today “announcing a significant amount of outsourcing within the IT practice of the firm.”
Our source also indicated that TF — currently running second in the Accountant of the Decade vote — is:
…making general statements about the firm as a whole in regards to outsourcing. We were told that if we were getting outsourced there would be “advanced warning” or that they would try to move people around without letting them go, etc.
“Advanced warning” like a flare gun? Church bells? A lighthouse? The people need something more specific, TF.
It sounds both internal IT and advisory IT professionals are getting the pleasure of the pep talk so if you were there (or going this afternoon, rumor is there’s two meetings), send us your thoughts and discuss.
We come with news this afternoon about more layoffs at G to the T that are rumored to have gone down earlier this month.
This latest information we have involves two managers and two senior managers in the Los Angeles office were shown the door around the first of the month. Our source has indicated that the breakdown was three in the audit practice and one in tax. These latest cuts would be in addition to the original ten that we reported on last month for LA.
If you have more information on these layoffs or have details on a different GT office, get in touch with us or discuss in the comments.
Earlier: Layoff Watch ’09: Grant Thornton
We received word late yesterday about two audit senior mangers in the Tampa office being shown the door yesterday. This makes us wonder if more professionals in the senior manager “parking lot” will take this is as a sign to either move on or will hold out hoping to eventually get a seat at the big table.
There doesn’t seem to be any kind of uniform method to the Deloitte’s cuts so if they’ve recently gone down at your office, let us know.
From a source:
Greensboro, NC office is being shut down. Admin staff are being let go. Most client serving have been given the option to transfer to Raleigh or work remotely.
We tried calling the Greensboro office but couldn’t get through to anyone and E&Y’s national PR team hasn’t returned our emails yet. This closing would follow the Manchester office closure that we initially reported on in October. We’re trying to get more details on the closure date, numbers, etc.
In the meantime, if you have more information on this rumored office closing or others get in touch with us and discuss in the comments.
UPDATE, 12/11: Another source has confirmed the closure. We’ve also learned that the Greensboro has in the nabe of 70 – 80 client service professionals. E&Y is still mum. Keep us updated.
Are Other Small Big 4 Offices at Risk of Closure?
We’re hearing more about layoffs in E&Y’s North Central offices today. The chatter is that cuts are now hitting advisory professionals in Detroit, Toledo, and Cincinnati. Our source indicated that it was 2 – 3 professionals in each office which puts the total number of layoffs in the region over 30 since this latest round started last month.
Rumor also has it that the Columbus office — home of dollar beer night — could also get into the axe swinging but we’re scant on details at this point.
These cuts in the advisory practice would be the first we have heard of since the dozen layoffs (that we confirmed) in the Pacific-Northwest.
Continue to keep us updated with the specifics.
Earlier: (UPDATE) Layoff Watch ’09: Update on Ernst & Young
We continue to receive details about the layoffs at E&Y’s Columbus office. The first bit of information is that one of the unlucky few — a recently promoted SA — was given one day to consider taking a transfer to another office. According to our source, the client the SA was serving caught wind of the dismissal and the client’s reaction convinced TPTB to let the SA stay on an additional week to finish his/her work.
Our source also indicated that new manager training was going on at the time and “those [managers] with potentially the best chance to speak on the behalf of those to be axed were all in sunny Florida oblivious to the proceedings.”
Oh and the dollar beers thing. As you may remember, the layoffs occurred the day before the office’s holiday get-down. The rumor is that the festivities had a tab in the nabe of $1,200, which included $1 beers.
This causes us to wonder a few things: A) No open bar? B) Beast or Natty Light? and C) we realize Columbus is a college town but $1 beers? Were there penny pitchers and $3 Jager shots too?
For reasons that escape us, we’re completely enamored with details that continue to emerge from this. Continue to keep us updated.
E&Y Columbus Layoffs Update
Layoff Watch ’09: Update on Ernst & Young’s November Round
While many Klynveldians are getting amped to cobble together some bears for the kids this morning we’ll pass along a little rumor about a rumor.
The rumor that the KPMG bigwigs have been considering a six year timeline to make manager in the audit practice has been kicked around for at least a couple years. Naturally, there were two schools of thought:
• Managers thought it was good idea
• SAs thought it was a terrible idea
According to a tip we received, apparently there is an email floating around that says the rumors about a “six year program are not true and that the firm will continue with existing promotion timing.”
A friend of GC told us that while it’s entirely possible that such an email exists, it’s definitely not coming down from 345 Park and could be some local office trying to calm down those SAs that are considered flight risks.
If you’ve been notified that your promotion timing is still on track, by email or otherwise, pass the info along or discuss in the comments.
We’ve received multiple reports of layoffs that occurred last week in the audit practice of the Los Angeles office.
The numbers have been described as “a few” and the news has been “hush hush” making us wonder if these cuts were some unfinished business from either the August and September rounds.
There also have been rumors about additional layoffs in Dallas tax but we don’t have any more details than that.
If you’ve got any details for these layoffs or details for other cities, get in touch and discuss in the comments.
Grant Thornton’s global revenue results have yet to come out, however the Times Online is reporting lower UK revenues for the past fiscal year. This widens the gap between GT and Big 4 and possibly jeopardizes any hope of the ‘Global Six’ moniker making it into the mainstream.
This despite their ambitious efforts:
Two years ago, Grant Thornton unveiled ambitious plans to increase revenue to £500 million. It had just acquired RSM Robson Rhodes and appeared set for rapid growth. There was talk that it could close the distance on Ernst & Young and break the Big Four’s lock on blue-chip audit and advisory work.
This, as the Times notes, appears to be only a pipe dream now. They dish a little gossip about GT merging with E&Y which was de-nied pretty adamantly by the UK CEO, ‘That’s absolutely not true and I’ve no idea where it comes from.’
We really wish we could take credit for starting that rumor but alas, we can’t. Furthermore, it wouldn’t be the same if GT had to merge with someone. It is, however, worth speculating if any type of semi-mega merger would even be possible. We touched on this topic some time ago but that was for sport so we’re asking for serious speculation now.
If you’ve heard merger talk at any of your firms discuss — or just wonder aloud about which firms would/could/should get together — in the comments and feel free to opine on GT’s latest efforts in the Global Six campaign.
Grant Thornton slips further behind the Big Four [Times Online]
There’s a lot of chatter about layoffs at Grant Thornton this week but we’re scant on details. So far, we’ve heard there were cuts in New York, Dallas and possibly the Southeast region.
And just for the hell of it, we called up GT to see if they could tell us anything. Unfortunately we just got voicemail but we’ll update you if they get back to us (they might, don’t be so pessimistic).
If you have more details, get in touch and ask around to your peoples that work in the House of Nusbaum to find out what’s going down.
In addition to the layoffs we reported on yesterday in Chicago and Dallas, we now have reports of cuts in Los Angeles, San Francisco, and Irvine. Our source on the left coast speculates that the current round can’t be too large in scope since everyone is already stretched thin.
So far it’s been in assurance only and we’re scant on details for severance so get in touch if you find yourself with some extra time on your hands or you have details on the numbers in your office.
UPDATE, Wednesday Nov 11th: Our sources are now reporting layoffs in the tax practice including the tax managing partner for the Phoenix office, and an executive director in Denver. We also have reports on tax layoffs in the Southern California offices. Per our source:
• Los Angeles: 4 that I know of. At least 1 Senior, 1 Staff
• Irvine: 4 that I know of. At least 1 staff
• San Diego: 4 that I know of. 3 Senior managers, 1 Senior.
Senior managers are reportedly receiving three months pay and A2’s are receiving one month for severance. Continue to keep us updated.
UPDATE 2, Thursday, November 12th: Twelve advisory professionals in the Pacific-Northwest region.
UPDATE 3, Friday, November 13th: Charlotte office dismissed three audit SA1’s. In the North Central region:
Pittsburgh, Cincinnati, and Cleveland offices all laid off three SAs. Twenty total layoffs reported between Pittsburgh (at least three), Cincinnati (at least three), Cleveland (3), and Detroit.
UPDATE 4: Saturday, November 14th: ~5-6 audit professionals in Minneapolis and ~1-2 audit in Milwaukee.
Chicago: In addition to the ~20 layoffs we originally reported there were ~2-3 in support roles were let go.
Bob Moritz, the U.S. Chairman, is trying to calm everyone down, as an email has been sent to the troops letting them know that it’s unlikely that there will be layoffs in the Assurance or Tax practices. We haven’t been able to track down a copy of the email yet but that’s the gist.
While this is good news, we would be more comforable if the email would have read something like:
“We’re absolutely, 100% sure that no one in Assurance and Tax will be laid off like we just did in Advisory. Write it down. No one. Not even you, guy that dicks around in the cubicle by the window so that he can see everyone approaching. Your utilization is in the crapper but it’s cool. You’re safe.”
Or he simply could have just added the photo to the email so everyone would feel better. Nothing says, “trust me” like a fresh pair of P. Dubs tighty-whities, amiright?
We’ve received a tip that human resources for PwC has made calls to staff saying “the lead partner [of the] group is reviewing everyone’s utilization numbers one person at a time.”
This is occurring in at least one industry group in the New York tax practice. Although our source stated that it was not unexpected for utilization to be scrutinized, it seemed unusual for a lead partner to be examining so many individual utilization numbers. Then again, PwC isn’t really known for a transparent performance review process.
Since the forced ranking trend seems to be in full effect, this could be the new standard operating procedure. The timing also seems dubious in the wake of (or during) last week’s layoffs in the advisory practice.
If you’ve recently been informed that your utilization rate is getting a close eye (and this comes as surprise) or if you know of the motivation behind such close inspection, email us at [email protected].
We’ve received tips that layoffs have recently occurred in both the Chicago and Dallas offices of E&Y. The reports out of Chicago were that layoffs occurred on Friday
and over the weekend.
Our source told us that the Friday layoffs were seniors in the Retail and Consumer Products industry group
and weekend layoffs were across as well as other industry groups. Altogether approximately 20 professionals.
We have fewer details on the Dallas layoffs except that they were a couple of managers from the asset management group in the audit practice. The small number leads us to speculate that these were performance related, similar to the cuts we reported in August.
There have been several rumors circulating about layoffs occurring this week at E&Y and other firms as well so if you have more details on the Chicago or Dallas layoffs or know of cuts in your office, send us the details to our tips line.
Maybe it’s just an informational sit-down for the new P. Dubs tighty-whities that you’re all going to be expected to wear but our contributor, Francine McKenna had this ominous tweet:
Apparently someone else may have an itchy trigger finger. According to the comments over at RTA the emails have gone out to an office on the east coast but nothing more specific than that.
Keep us updated if you get a notice or if you know someone who gets a notice, or you know someone who knows someone, etc.
According to a tip we received, beginning this week E&Y is requiring its professionals in Bermuda to charge 50 hours a week through mid-December. This is up from from the normal 40, according to our source.
Our source also indicated that the mandatory 50 hours is considerably more than what the other firms require, citing Deloitte who “has minimum 37.5 hours year round.”
For our friends working offshore, give us the scoop on your hours approaching year end. We also expect a few of you have worked in Bermuda and even more of you have worked with professionals in the Bermuda or other offshore offices, discuss your thoughts in the comments.
Does anyone want a job helping socially awkward partners at E&Y? After last week’s inappropriate ice-breaker rumor, we received another tip about a partner leaving a sensitive voicemail with all employees in the region:
The voice mail says this is for partners only and then discusses the new model EY will be using to determine the # of admin staff in an office and gives the date when admin cuts will happen. Also talks about how all partners will be required to do a mid year review in Jan 2009 (by the way, we all heard the partners saying later how this had never been done in the past so clearly it was papering the files for upcoming partner cuts).
According to the tip we received, the partner decided that leaving another voicemail, asking all non-partners to delete the first message, was the next logical course of action. On the one hand, assuming that all E&Y employees would abide by the honor system and delete the first message represents the strong faith this partner had in their employees.
On the other, it may have been just as effective to say “Don’t worry about that last message, I was just fucking with you.”
Maybe! Depends on who you ask. We’re looking for opinions since we received a tip on what Jim Turley is pulling down:
Saw some info yesterday in a partner’s office. JDawg is pulling down $6 million…every year in October timeframe the partners at EY get a partner report on the “partner news network”. In this report EY shows partner information – the 5 highest paid US partners that are not in client service. So this includes generally JDawg, the AABS managing partner, tax managing partner, the Americas Vice Chair and a few other vice chairs. They started giving out this information about 4-5 years ago.
Our tip also stated that the non-J Dawg execs were pulling down in the nabe of $2.5 million.
Considering that J Dawg’s CEO duties include appearances on CNBC, being an IFRS cheerleader and eating f*(king chicken with Rahm, among other glad-handing and back-slapping duties, $6 mil makes for a nice round number.
Is $6 million fair for J Dawg? Discuss in the comments and pass along any further details you’ve got JT or other CEO salaries.
As if there isn’t enough bad blood in the land of Klynveld, we received this tip:
Not only did the firm spend thousands of dollars to send new hires to Rome, they also gave then [sic] all single rooms. Roomates [sic] are required for all staff level people at firmwide trainings.
We looked around and depending on when these new associates were in Rome, it may have been god-awful hot, so it couldn’t have been that great of a trip. Then again, we’re not familiar with this whole Italian get away so if you’ve got details, discuss in the comments or shoot them to us.
Not that Klynveldians need reminded but tomorrow is the rumored next round of layoffs. This time its rumored to be the tax practice and perhaps the advisory practice as well making cuts.
Someone in the Philadelphia office got their call earlier than planned according to a tip we received:
…one associate who received a phone call at 3:00 PM letting her know that her services were no longer needed. She was initially told this would likely happen on the 21st, but for some reason, the powers that be thought it more appropriate to call someone on the 15th
If you’ve got details on your office or if you have received a request for a meeting, let us know and we’ll continue to update you as we hear more.
A little follow-up from our request for the latest on highly anticipated post-September 15th layoffs. Here’s what we’re hearing:
Sources and some comments have indicated that the dates to be wary of are today the 16th, tomorrow the 17th, next Monday the 21st, and next Tuesday the 22nd. The word is that these will be tax and advisory practice cuts only.
KPMG did not immediately respond to our request for comment on these dates. If you have specific information on your anything going down at your office send us the scoop at tips[email protected].
We just received word that Pandora is blocked for Uncle Ernie’s troops. We’re thinking if BW had got ahold of this news, E&Y would have dropped out of at least the top five.
We thinks this is a strange way to wish everyone a nice holiday weekend but we understand that everyone shows love differently. Anyone else out there now working in eerie 2001-esque silence? Confirm for us or discuss in the comments.
As if you didn’t need another excuse to go on a three day bender, we received a tip that audit professionals will be getting laid off at the Dallas Radio Station next Tuesday, the 18th. Tax professionals will get their turn in September, most likely after the filing deadline.
Word is that no one level is safe as the cuts will be made at all levels including partners.
did not immediately respond to our request for declined to comment.
If you’ve got more information on the sitch or you’ve heard similar rumors for other offices, drop us a line at [email protected].
A few weeks back we dabbled into the sex lives of those of you that call yourselves accountants. Several comments
eluded alluded that national trainings are about as a good opportunity as some of you are going to get.
National trainings are not only a great time to make awkward sexual advances, they’re also a great opportunity to get together with hundreds of your peers and drunkenly complain about your superiors and subordinates. It’s also an opportunity to make a complete ass out of yourself in front of those same peers.
National trainings have also been known for chicanery such as but not exclusive to:
Check out the idiocy, after the jump
• All night excursions to the strip club where one person passes out in the bathroom and somehow the whole night ends up on your manager’s expense report.
• A night of bottle service that results in dragging several lifeless bodies back to the hotel but thanks to some friendly hotel staff, everyone ends up safely back in their rooms.
• Training Instructors showing up to class over an hour late, wearing clothes from the previous day and smelling like Mel Gibson.
• A week where, instead of spending your time learning accounting/tax/audit updates, you spend the entire week in your hotel room working a normal 12 to 14 hour day because your manager’s whip somehow has the range.
So because summer is winding down and national trainings are coming to end for another year, we’d like some stories to order to get an idea of how good/bad/ugly your trainings this year.
We’ve heard that some firms have shortened some of the trainings to just a few days rather than a full week and also that the firms are seriously clamping down on the expenses so maybe your city’s blowout party got axed or you got charged back for the round of shots you bought for everyone. Regardless share your experiences in the comments and send us other gossip that you want us to put up at [email protected].
Over the weekend we received an email that basically confirmed our suspicions that many of you were working over the weekend. Considering the time of year, it doesn’t come as much of a surprise that hours are starting to pile up and you’re spending at least one hour a night deciding where you’re ordering take out from.
We received word over the weekend that tax groups at
KPMG PwC all the major firms are working like crazy already in anticipation for the September 15th and October 15th filing deadlines.
There have also been whispers among some in the tax practice at KPMG that layoffs may occur after the deadlines due to large number of idle hands that will be around after the deadlines pass.
Tax associates out there, let’s know what your hours have been, what you’re hearing about post-deadline layoffs, and where you don’t want to get take out from ever again.
We’ve heard some rumors that all the firms are giving serious consideration to freezing pay this year and possibly pay cuts in the Northeast and Mid-Atlantic regions. This would follow the Radio Station rumors that we mentioned last week.
Top performers and promotees, determined by God knows how, may be getting bumps but we haven’t heard anything definite. If you’ve got some deets or just more rumors, shoot us an email to [email protected].
Rumor out of Deloitte down-under, where, supposedly, some associates got canned because of organizing drug deals on Big D’s premises. Details are pretty scarce but this got us thinking:
More, after the jump
1. They were probably tax associates. They’re an unassuming bunch.
2. Is the pay so bad in Australia that Big D associates are resorting to illegal means of earning supplemental income? Wouldn’t turning tricks be easier?
3. How in God’s holy name did these f’n amateurs get busted? We’re they walking around soliciting potential customers like they were at a Phish concert?
We reached out to a Deloitte spokesperson who said they won’t comment on rumors. If you hear of other extracurricular activities going on at any of the firms, shoot us the scoop at [email protected]