Ernst & Young Slashes 5% of US Workforce, Announces Major Layoffs

Ernst & Young (EY), a global professional services provider, has announced plans to eliminate approximately 3,000 jobs or 5% of its workforce in the US, according to reports by Financial Times and IANS. This decision follows the collapse of a plan to spin off EY's global consulting business into a separate company. The layoffs make EY the latest member of the 'Big Four' consulting firms to reduce its workforce in response to shifting economic conditions.

According to sources, an EY spokesperson stated, "After assessing the impact of current economic conditions, strong employee retention rates, and overcapacity in parts of our firm, we have made the difficult business decision to separate approximately 3,000 US employees." They added that these actions were part of the ongoing management of the business and not a result of the recently concluded strategic review, known as "Project Everest."

Other 'Big Four' consulting firms have also announced job cuts in recent months. KPMG reduced its US staff by 2% in February, while Accenture plans to cut 2.6% of its global workforce over the next 18 months. McKinsey is set to eliminate about 3% of its workforce, equating to approximately 2,000 jobs. In January, global investment firm Goldman Sachs laid off more than 3,000 employees.

The 'Big Four' accounting and consulting firms experienced a hiring boom during the post-pandemic recovery. However, consulting businesses have seen a sharp slowdown over the past year, following a period of significant growth. These workforce reductions indicate an adjustment in the professional services sector as firms respond to evolving market conditions.