EY’s US unit to cut 3,000 jobs after failed split – but UK division won’t follow suit
EY’s US unit announced today that it will cut some 3,000 jobs after the Big Four accounting firm dropped its plan to separate its consulting and audit divisions.
EY’s global executive committee announced last week that it had ditched the plan, known as ‘Project Everest’, following opposition from the US unit.
EY’s US unit today said that after “assessing the impact of current economic conditions, strong employee retention rates and overcapacity” in parts of the firm, it has decided to go ahead with layoffs.
“We have made the difficult business decision to separate approximately 3,000 US employees, representing less than 5 per cent of our US workforce,” EY US said in a statement emailed to City PM
But it said the decision was not linked to the failed split.
“To be clear, these actions are part of the ongoing management of our business and not a result of the recently concluded strategic review, known as Project Everest,” the statement said.
It added that it will offer “comprehensive support” to those affected.
The announcement comes after EY’s UK bosses were reportedly said to be discussing cost-cutting measures following the decision to ditch the split plan.
According to a recording of an internal call that took place last Wednesday, reported by the Financial Times, the firm’s UK bosses warned that cuts were coming.
“We have inefficiencies in our business, which we can start to address now,” Anna Anthony, UK managing partner for financial services, said on the call, according to the report, adding it was “already working on reducing our costs.” She did not give any further details on what the cost-cutting measures would look like on the call.
However, a spokesperson for EY’s UK unit told City PM today that it would not be cutting any jobs.
“The announcement is specific to EY in the US. There are no similar plans in the UK,” the spokesperson said.