EY Layoffs December 2023: Latest Update

Ernst & Young (EY), a leading member of the Big Four accounting firms, has strategically initiated a significant round of partner layoffs in response to a noticeable slowdown in specific service demands and as a cost-cutting measure following the abandonment of its ambitious plan to split the firm. The impact is felt across diverse business units, with over 10% of advisory partners and approximately 4% in strategy and transactions affected. Unlike routine annual cuts, these layoff signal a profound shift in EY’s trajectory, impacting over 100 partners in consulting and more than 30 in strategy and transactions.

The departure from customary annual adjustments underscores the depth and scope of these organizational changes, following the earlier release of 3,000 U.S. employees in April. EY, like other major players in the sector, grapples with decelerating revenue growth, prompting workforce streamlining. The industry experienced aggressive hiring during the pandemic, but post-pandemic attrition has been slower, necessitating strategic recalibrations.

EY emphasizes the limited impact on its workforce and demonstrates sensitivity by deferring start dates for some new hires. The firm pledges comprehensive support for affected employees, reflecting a human-centric approach to these challenging shifts. As part of its long-term strategy, EY actively transforms its operations to align with client needs, acknowledging the cyclical nature of consulting demand.

Industry giants, including KPMG, Deloitte, and McKinsey, have also adjusted their workforces. EY’s revenue in the Americas, including the U.S., reached $23.62 billion for the fiscal year ending June 30, a commendable 12% increase but notably slower than the preceding year’s 19% growth. Globally, consulting and transactions contributed $22.17 billion, comprising 45% of total revenue. Following the scrapped split plans, EY seeks cost reductions and operational enhancements.

Governance reforms proposed by EY aim to strengthen structures and increase partner involvement, especially pertinent after the failed split. The appointment of Janet Truncale as global chair from July 2024 signifies a crucial juncture, positioning her to lead EY through this transformative phase. As EY adapts and innovates, these decisions underscore its commitment to resilience and forward-thinking leadership in response to industry shifts.

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