Proactive Investors - ‘Big Four’ accountant Ernst & Young is set to cut 3,000 jobs in the US just a week after plans to spin off its consultancy wing collapsed.
Cuts will mainly affect the consultancy side of the business, EY told staff, and come amid “the impact of current economic conditions, strong employee retention rates and overcapacity”.
EY reassured that roles were not being cut in light of the collapsed spinoff plans, which fell through last week after its US bosses raised concerns that its auditing wing would not cope alone.
The spinoff plans still cost EY some US$600mln despite falling through, according to company executives, and had been worked on for over a year.
The layoffs of 5% of EY’s workforce are rather “part of the ongoing management of the business”, the firm said, as it joins rivals in gearing up for an anticipated US recession this year.
Competitors KPMG and Accenture (NYSE:ACN) have already announced staff cuts of 2% and 2.6% respectively this year, as part of a wider industry recoil from a post-pandemic hiring spree.