EY in the UK is expanding its redundancy program by reducing an additional 150 jobs, reflecting the broader challenges faced by the Big Four firms amid declining demand for specific services.
According to Financial Times, EY has initiated ten redundancy consultations in recent months due to a market slowdown. This action has doubled the total number of redundancies for the year to 300.
EY is set to implement workforce reductions affecting multiple sectors within the organisation, including its legal arm and the strategy and transactions advisory business, EY-Parthenon. The streamlining process includes the closure of EY Riverview Law, the Manchester-based legal services firm acquired by EY in 2018. This closure will result in a significant portion of its workforce facing layoffs.
These decisions come amidst challenges encountered by the Big Four—Deloitte, EY, KPMG, and PwC—as they grapple with increased expenses and dwindling demand in a challenging economic climate.
Previously, EY announced approximately 150 job cuts within its financial services consulting arm, with an indication to expect more moderate salary increases across the organisation. The redundancy program has now broadened to encompass multiple business segments, especially areas like transactions and deal advisory, which are expected to face ongoing challenges through 2024.
In April, following the abandonment of Project Everest, a global initiative to divide the firm's audit and consulting divisions, EY's UK partners were advised to brace for cost-saving measures. As part of the recent redundancy consultations, approximately 40 positions are projected to be eliminated at EY-Parthenon, while EY Riverview Law anticipates around 55 job cuts.
Compared to the US business, where 3,000 positions—equivalent to 5% of the workforce—were slated for elimination earlier this year, the impact of redundancies in EY's UK sector appears less severe. The UK branch employs about 21,000 individuals.
During the most recent financial year, EY's UK partners experienced a 5% decrease in average earnings, taking home an average of £761,000.
Responding to these developments, EY stated: "We continuously evaluate our business's resource needs and, in certain areas, are proposing adjustments to align our current resources with market demand. We prioritise the redeployment of our employees to other parts of the business whenever feasible."
EY's acquisition of Riverview was part of its strategy to bolster the firm's legal managed services division. Cornelius Grossmann, the firm's former global law leader, highlighted Riverview Law's expertise in a burgeoning market sector, foreseeing opportunities for EY's clients through the marriage of Riverview Law's strengths with EY's global reach and legal expertise.