Deloitte announces job cuts days after EY let go of 3000 US employees. Will the Indian staff see the effect?
Ernst & Young and Deloitte, two of the Big 4 firms just announced that they are laying off over 4000 employees combined. Overcapacity and economic conditions are cited as the primary reasons.
- Ernst & Young and Deloitte, two of the Big 4 firms, have announced over 4000 combined job cuts.
- Employees in the US are reported to get pink slips.
- Will we see any more mass layoffs in the Big 4 in 2023?
Ernst & Young and Deloitte Join the 2023 Layoff Spree
Ernst & Young, one of the Big 4 consulting firms, is letting go of 3,000 of its employees or 5% of its workforce.
This decision came less than a week after dropping their plan to split into auditing and consulting units.
And wait, it doesn’t end there.
Just 4 days after EY’s announcement, Deloitte, another one of the Big 4 firms, shared the same news.
They are reportedly expected to cut 1,200 jobs in the US, with its layoffs impacting the US office as of now.
Why EY is laying off in 2023
The Big 4 accounting firms, including Deloitte, EY, KPMG, and PwC, dominate the global accounting market share.
These firms had increased their headcount during the pandemic.
EY, although not the first one of the Big 4 to join the firing spree, just recently took the tough decision. Their US employees are getting the pink slips due to overcapacity and current economic conditions.
The job cuts are expected to mainly affect the consultancy side of the company.
EY denied that the layoffs were due to the failed break-up of operations, codenamed Project Everest.
However, EY India has no plans to cut down on its staff, for now at least.
Why Deloitte is laying off in 2023
Deloitte's US headcount rose from 65,000 in 2021 to 80,000 by the end of 2022, following the Covid-19 pandemic.
However, the firm saw a decline in merger and acquisition activities.
The job cuts, which will amount to a 3% reduction of the total workforce, will reportedly affect Deloitte's Risk and Financial Advisory division, as per a report.
A spokesperson for Deloitte told the Financial Times that they are making modest personnel actions where necessary as their US businesses continue to experience strong client demand, but growth in select practices has moderated.
Despite initial optimism in the sector following the pandemic, growth, and hiring have slowed significantly due to rising interest rates and global recession fears.
KPMG was the first of the Big 4 to announce layoffs in 2023, reducing its US workforce by 2%, or about 700 employees.
The job cuts were limited to KPMG's Advisory Practice and did not include any partners. Other companies like McKinsey & Company started cutting 1,400 jobs last month as part of a restructuring effort.
Accenture, the Irish-American IT Company is also reportedly letting go of about 2.5% of their global workforce over 18 months.
The Great Layoff of 2023 is carrying on across sectors, it seems.
But the big question is, will the remaining firm of the Big 4 announce the news of layoffs soon?
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