In the latest round of layoffs, global accounting giant Ernst and Young (EY) is sacking dozens of partners across all US businesses, mainly in the advisory sector, to save costs as the company is facing lower demand for specific services, according to a Wall Street Journal report. The move comes after EY abandoned its plan to split the company.
The layoffs are affecting over 10 per cent of partners in consulting and nearly 4 per cent in strategy and transactions, but they touch the audit and tax arms as well, according to the WSJ report citing people familiar with the matter.
The layoffs will be over 100 partners in consulting and more than 30 partners in strategy and transactions at both junior and senior levels, it said.
Layoff notifications to partners started last week and are expected to continue this week.
Though the partner cuts are not uncommon due to performance evaluations, this time it surpasses the usual cuts.
EY in April this year also laid off 3,000 US employees, which was about 5 per cent of its total workforce in the country.
EY, along with other accounting and consulting companies, is facing slowing revenue growth. Also, the firms aggressively hired people during the pandemic, propelled by higher demand for consulting in areas such as corporate strategy and digital transformation.
The company said the layoffs affected “limited number of people”. “These decisions have been thoughtfully made with respect and fairness for all of our people and the future of our business… EY will offer comprehensive support to those who are affected,” WSJ said quoting a spokesperson.
“As part of our long-term planning, EY has been transforming our business to focus on the areas where our clients have the greatest needs,” the spokesman said.
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