EY cuts jobs as governments crack down on contracts after PwC scandal

Big four consulting giant EY has axed more than 50 jobs and disbanded its Future Friendly team as government revenue dries up following the PwC tax leaks scandal.

CBA was a client of the axed EY Future Friendly division. Picture: Britta Campion/The Australian

Accounting and consulting firm EY has cut more than 50 jobs, including partners, as depressed revenue from federal and state governments in the wake of the PwC tax leaks scandal fails to recover.

EY axed its entire Future Friendly team – purchased with great fanfare less than two years ago – and its health services team.

EY, Deloitte, KPMG and PwC have missed out on billions of dollars of business since the scandal erupted in 2022, which revealed a breach of trust by PwC to Treasury; and inadvertently shone a light on just how much taxpayer dollars were being paid to consultants with little oversight or understanding by the general public.

PwC suffered the brunt of the punishment and ended up selling its government consulting unit – now known as Scyne – to a private equity firm to clean house.

All of the big four missed out on work as public servants lavished contracts on lesser known rivals such as Nous, FTI or KordaMentha instead.

EY purchased the 40-professional strong Future Friendly team, headed by Nick Gower and Jon Christensen, in August 2023.

At that time, EY’s financial services managing partner for Oceania, Grant Peters, declared the purchase would “enhance” the firm’s ability to give clients “deep industry knowledge and technical experience they need to address their biggest transformation challenges.”

Its clients included CBA and government divisions such as Service NSW, the Victorian and ACT governments, and Defence Health, with its work largely focused on building apps.

When contacted about the job losses, EY said it “regularly” reviewed its operations to ensure its “business and workforce remain aligned with market conditions and client needs.”

It went on to say the job cuts would allow it to “better support clients.” It did not say how axing teams would help this cause.

“We recognise the impact this has on our people (and) remain dedicated to delivering high-quality services that meet evolving client needs,” EY said in a written response.

It added that the latest job cuts represented less than 1 per cent of roles across the Oceania workforce.

Earlier this month, EY made a recommendation to the Senate that an independent panel of bureaucrats rather than parliamentarians have oversight of consulting contracts worth more than $2m.

The idea was lodged with a parliamentary joint committee as the Senate considers a bill that would create a new public consultancy committee to supervise consultants.

The government had been under pressure to rein in consultancy spending after it was revealed Canberra was a river of gold for the big four consultancy firms.

While the job cuts in Australia have been spurred on by the ongoing furore from the tax leaks scandal, the global industry is also experiencing a lean year amid global economic uncertainty.

Originally published as EY cuts jobs as governments crack down on contracts after PwC scandal