Less than a week after the unit’s protest thwarted the global accounting giant’s intention to break apart its audit and consulting operations, the United States branch of Ernst & Young said on Monday that it would be laying off five percent of its workers.
Over 3,000 of the company’s workers in the United States would lose their jobs as a result of the layoffs.
According to EY U.S., the decision was made after analyzing the impact that the present economic conditions, high staff retention rates, and “overcapacity” in portions of the corporation had on the business.
EY, based in London, called off a proposed overhaul of its businesses that was meant to address regulatory concerns over potential conflicts of interest last week after the company’s U.S. Executive Committee decided not to ratify the plan. This decision came after EY spent months trying to woo potential partners.
When the Federal Reserve’s quantitative tightening jerked the economy out of its overheated state during the epidemic era, the business sector in the United States has been struck hard by a wave of layoffs.
Reportedly, KPMG, one of EY’s competitors in the “Big Four,” is firing some of its employees. The Big Four also includes the accounting firms of Deloitte and PricewaterhouseCoopers (PwC).
The Financial Times was the first to break the news of the layoffs at EY. The paper stated that the layoffs will mostly impact the consultancy industry.