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Ernst & Young's US arm has announced a 5% reduction in its workforce, a move that will affect 3,000 employees while citing "overcapacity" as the main reason.
Ernst & Young (EY), one of the 'Big 4' audit firms, said that the decision to layoff was taken after considering the persisting economic conditions, robust employee retention rates and "overcapacity" in certain parts of the company. According to reports, this reduction would primarily affect the firm's consulting business.
This is one of the highest, if not the highest, layoffs announced by a consulting business firm this year.
Recently, EY was unable to split up its business. The firm wanted to split its segments into different firms to avoid regulatory issues, but the same couldn't be completed on account of the US office.
This comes after the firm took several steps to reduce costs in recent times. The firm recently axed holiday bonuses for its US employees, citing a slowing economy as the main reason. Moreover, some reports have suggested that the UK office is also planning some cost-cutting measures.
According to studies, job postings from Big 4 firms have seen a 50% decline in the past year. Moreover, the consulting business has seen a sharp decline due to rising interest rates among other factors.
Furthermore, EY is not the only business announcing layoffs. KPMG laid off 2% of its workforce in February this year. Accenture and McKinsey have announced that they will be cutting off 2.6% and 3% of their workforce respectively in the coming months.
- Aman Agarwal
Also read, how ZestMoney plans 20% layoffs as PhonePe deal falls through.
