The cuts were announced less than a week after the failure of a plan to spin off EY’s global consulting business, a strategic review dubbed “Project Everest.” The layoffs represent approximately 5% of EY’s US workforce.
“After evaluating the current economic conditions, strong employee retention rates and
“These actions are part of the ongoing management of our business and are not a result of the recently completed strategic review known as Project Everest,” he added.
Consulting business has slowed sharply in the past year after a period of massive growth as clients rushed to upgrade their IT systems during the pandemic.
EY’s cuts are more robust than those announced by other consulting groups in recent months. KPMG laid off almost 2% of its US staff in February, and Accenture said it would cut 2.6% of its global workforce over the next 18 months. McKinsey is restructuring its back office in a way that will cut about 3% of its workforce.
EY’s US executive team warned last week that it was planning a “simplification” of the firm to save up to $500 million in annual costs. UK chief executives have sent similar signals about the need to cut costs.
All four of the Big Four accounting and consulting firms have started hiring during the post-pandemic recovery, struggling to keep up with aggressive workloads and an unusually high number of layoffs.
However, the four companies have drastically reduced recruitment recently. The latest monthly survey carried out last week by William Blair found that jobs offered by the Big Four firms have shrunk by 62% compared to 2022.
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