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EY makes 232 staff redundant as consulting demand plummets

Business

The cuts come just days after PwC revealed plans to lose 300 jobs and close an Adelaide hub.

By Philip King 10 minute read

EY will make 232 staff redundant in response to reduced demand for its consulting services in an “uncertain environment”, Oceania CEO David Larocca says.

Mr Larocca said the firm began FY24 with an expectation of growth but had been surprised by the market downturn and been forced to adjust.

“We are in a challenging and uncertain environment, with the market continuing to shift at the fastest pace that we have experienced in the last 15 years,” he said.

“This shift in the market is being driven by a range of factors, but is particularly being felt in the demand for consulting across government and financial services, and parts of our corporate client base.”  

“This has had a significant impact on the demand for our services, and we are forecasting for this reduced demand to be felt for most, if not all, of this financial year.”

He said that the firm had cut costs, adjusted its recruitment and deferred start dates, but those actions were insufficient to prevent 232 redundancies across Australia.

“The decision to make people’s roles redundant has been incredibly difficult, and this clearly is not an outcome we wanted or anticipated when we started out this year,” Mr Larocca said.

“But we have taken these steps to protect the sustainability of our business into the future, for all our people.”

The EY job losses are just the latest at the Big 4 as the government and public sector reduce their reliance on external consultants.

Earlier this week, PwC revealed it would cut more than 300 jobs and close an Adelaide service hub as the firm absorbs the backlash from its tax secrets scandal, reduced demand and the spin-off of its government consulting arm.

The EY decision comes after sweeping job cuts at its US and UK operations in the wake of the failure of Project Everest, which was an attempt to split the firm into separate audit and consulting companies that cost $US600 million.

Rumours of job cuts among the nearly 9,000 staff at the Australian arm were denied by EY in April, although insiders said they were inevitable as partners tried to compensate for the cost of Project Everest.

In July, a report on workplace culture at EY in the wake of the death of an employee found problems with bullying, sexual harassment and racism at the firm after interviewing hundreds of staff.

The review said despite efforts by EY to “advance a safe, inclusive and respectful culture” a range of harmful behaviours and the “critical issue” of long working hours meant more than 40 per cent of EY staff were considering quitting.

Many of the problems – especially long hours and bullying – “have their origin in the firm’s business model” the review found, which staff believe drives “a focus on profit and delivery over people”.

 

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Philip King

Philip King

AUTHOR

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

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