EY Oceania looks at hiring to cut costs after Project Everest failure

EY Oceania has warned the firm is looking at ways to cut costs, including not filling vacant roles, after its Project Everest failure.

EY Oceania CEO warns firm will look at other ways to cut costs after Project Everest failure. Picture: Chris Pavlich

EY Oceania will leave jobs unfilled or close job postings in response to the failure of plans to split its audit and consulting business as it seeks to cull headcount and costs.

The professional services firm announced last week it was halting plans to split the business’ audit and consulting arms across its sprawling global footprint, putting the scheme dubbed Project Everest on ice.

In a meeting earlier this week, EY Oceania chief executive David Larocca told consulting staff there were no plans to actively reduce headcount across the Australian business but hinted the firm would look at other measures to cull costs.

An EY Oceania spokeswoman told The Australian the job cut announcements related to the US business and the local operation was “in a strong position with no plans to reduce headcount”, but noted the firm would look at pulling back on recruitment “where necessary”.

“We will continue to make decisions as we always have – protecting the business and striking a balance between current performance and investing for the future,” she said.

“There is no question we are in a very different market to the past couple of years, with headwinds and uncertainty ahead of us.

“We are still experiencing solid growth and demand for our services across many parts of our business. We have pulled back on recruitment where necessary.”

EY Oceania has almost 432 open job postings on LinkedIn.

However, the company’s internal jobs search system shows only 212 open roles across the business.

The firm announced on Tuesday it would move to cut 3,000 jobs across its US business, citing “overcapacity” after a hefty hiring spree during the pandemic.

EY’s American business said the cuts, amounting to 5 per cent of the firms’ total US workforce, would slim down staff numbers which have built up over the pandemic.

If EY Oceania were to slash a similar proportion of its 9000-strong workforce in Australia as many as 400 staff may be on the chopping block.

EY sources warned they expected the Australian business may look to reduce wage growth or bonuses in response to the costs of Project Everest.

Project Everest would have seen the firm’s consulting arm split from the audit business and floated on the share market after loading up on debt to pay audit partners, as well as fund pensions for retired partners.

The project was scuttled after partners at the US business failed to agree on how to handle he divvying up of tax resources, with concerns the audit arm would be weak and underfunded.

Project Everest is understood to have cost more than $US100m ($150m), with teams across the business working on structuring the split.

Originally published as EY Oceania looks at hiring to cut costs after Project Everest failure