Ernst & Young has informed its workforce that it will be cutting 3,000 jobs in the United States. The London-based financial services company, which is one of the ‘big four’ firms, is carrying out the job cuts to address ‘overcapacity.’
This move comes less than a week after the collapse of Project Everest, a plan that aimed to create a new company by spinning off EY’s global consulting business. The project reportedly consumed more than a year of work and cost the company over $600 million.
According to the Financial Times, the consulting side of EY’s business will be the most affected by the job cuts. The layoffs will account for approximately 5% of EY’s US workforce.
An EY spokesperson said, ‘After assessing the impact of current economic conditions, strong employee retention rates and overcapacity in parts of our firm, we have made the difficult business decision to separate approximately 3,000 US employees. 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.’
Compared to its competitors like KPMG, Accenture, and McKinsey, EY’s job cuts are deeper. KPMG laid off close to 2% of its US staff in February, Accenture announced that it would cut 2.6% of its global workforce over the next 18 months, and McKinsey’s restructuring will reduce about 3% of its workforce. Consulting businesses have slowed sharply due to the rise in interest rates and other related factors.
Earlier, EY had cancelled holiday bonuses for its US staff due to the slowing economy, and the firms in the sector have sharply reduced their hiring. According to the latest monthly survey by William Blair, an equity research firm, job postings by the ‘Big Four’ (Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers) are 50% lower than a year ago.
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