EY cuts 230 staff as “challenging’’ times take their toll

Professional services firm EY has made 230 people redundant as the depth of impact of ‘challenging and uncertain’ business conditions take the firm by surprise.

EY boss David Larocca said it didn’t expect the turn of conditions at the start of the year.

Professional Services firm EY has made 232 people redundant as the “challenging and uncertain’’ business environment takes its toll.

The cuts follow 338 jobs being slashed across rival firm PwC on Wednesday, with that firm shuttering its Skilled Service Hub in Adelaide and cutting roles more broadly following the spin out of government relations arm Scyne Advisory.

KPMG also recently let go 100 local staff amid cuts across the firm globally, following it making 200 local positions redundant in February.

EY regional managing partner David Larocca said on Thursday the firm had started the year expecting “continued growth and momentum’’, albeit at lower levels than last year.

However it had become apparent there had been a “shift in the market’’.

It marks a challenging year for EY across many aspects.

“We are in a challenging and uncertain environment, with the market continuing to shift at the fastest pace that we have experienced in the last 15 years,’’ he said.

“This shift in the market is being driven by a range of factors, but is particularly being felt in the demand for consulting across government and financial services, and parts of our corporate client base.

“This has had a significant impact on the demand for our services, and we are forecasting for this reduced demand to be felt for most, if not all, of this financial year.’’

The affected staff were notified Thursday.

“We didn’t anticipate the need for these measures when we started out the year, and we regret that these individuals have been impacted,’’ Mr Larocca said.

Mr Larocca said EY had already made several adjustments, aiming to preserve roles, including “re-basing our recruitment activity; redeploying people wherever possible from areas of lower demand to higher demand; deferring some graduate start dates; and managing leave options and balances’’.

“This is in addition to the broader cost measures we have deployed such as ceasing non-essential travel.  

“Regrettably, this hasn’t been enough to manage through the downturn, and after making these changes, we made the difficult decision that redundancies were required in some parts of our business, resulting in 232 people across Australia leaving EY Oceania.’’

In the Adelaide office 17 staff were let go, with the consulting arm bearing the brunt with 16 roles eliminated.

Mr Larocca said EY remained committed to delivering on all the recommendations of the independent Elizabeth Broderick review which was commissioned in the wake of the death of an employee at EY’s Sydney office last year.

That review found that long hours and overwork were a “critical issue” at the firm, while 15 per cent of staff reported experiencing bullying and 10 per cent indicated they had experienced sexual harassment.

EY also revealed recently it was the firm at the heart of another tax scandal to hit the consulting industry, with a former partner accused by the Australian Taxation Office of significant misconduct.

EY proactively asked the Federal Court to have its name revealed, following pressure from the Senate for the firm in question to identify itself.

Court documents show the former partner was sacked in August 2022 by EY after he disclosed to the firm he had received more than $700,000 in allegedly “unauthorised” financial benefits from the tax scheme.

This followed the furore over PwC’s tax scandal, which related to it using confidential government tax briefings to create tax avoidance strategies for clients.

That scandal claimed the scalps of former chief executive Tom Seymour and a further seven top partners, as well as forcing the company to spin out its government consulting business, Scyne Advisory, to private equity player Allegro funds in a $1 transaction.