Yes, there is a speculative setting where this happens. The BBC revealed yesterday (at https://www.bbc.co.uk/news/business-65305165) the clear message ‘EY cuts 3,000 jobs in US blaming ‘overcapacity’’, and I wonder what really the issue is. You see when you have to shed 10-20 jobs there are all kinds of explanations. But when you shed 3000 jobs something else is going on. I wonder what it is. And there is plenty to question. You see on their website they claim “Apply now. We recommend applying early as we will be recruiting on an ongoing basis, and positions will close once filled. View the current opportunities below. There are a small number of programs which have closing dates. Once we open for those programs, their closing dates will be listed underneath the program.” My issue is that when you shed THAT many jobs, you need to adjust your career page as well. I personally think that this is a job for HR, but that remains debatable. When you shed 3000 jobs and your career pages imply that it is business as usual another setting comes to mind. To be honest I am not sure what it is, but something is there. In the 90’s and ten years ago it was in IT and several other places about shedding the expensive staff members and getting cheap labour (graduates). Now there are a few issues. The first is that Ernst and Young has over 360,000 people. This means that only 1% is affected and that happens. Yet this only affects US staff and the number I gave you is global. There are issues in banking and that could be a setting, but whatever I give you is speculative and might not apply. But in the US we see that there is slowing but they are surpassing the numbers, as such these numbers do not add up. But the BBC gives us a handle. We are given “The move comes as corporate America is bracing for an economic downturn”, OK I can get along with that, it merely implies that EY was ahead of the curve which is never a bad thing. And they are not alone, we are also given “Accenture is slashing 19,000 jobs or roughly 2.5% of staff globally, while McKinsey is reportedly cutting about 1,400 roles or 3% of its employees” and there is more bad news, but not for EY. You see, in an age of aging losing that much staff might become counterproductive later on. We see the events that call for an economic downturn and that is fine, this happens. But in other news we see Europe going on (slightly less god than now) and the Middle East and Asia is making waves, larger positive waves. I would think that retrenching staff in the latter two areas might give a raise to better times down the track and optionally sooner. OK, I am pretty much alone in this. Most BI people say I am bonkers and they might be right. But the idea of losing qualified staff in a world where relocating them might offer more seems weird. You see, only two days ago the Financial Times gave us ‘Dubai court orders KPMG to pay $231mn for Abraaj fund audit failure’ according to the courts KPMG dropped the ball, which in sales terms means that their customers are looking around. That could be good news for EY and we do get that these grounds are not the same, but to get parties shifting into these areas implies that other areas need filling up and losing 3000 staff is not a healthy way to fill places and relocate people to fertile accountancy lands. Even as we see that most are shed from the consulting division, the truth is that most consultants are versatile, there are grounds of not losing that much staff, but that is purely a personal view on the matter. Consider the cowboy stage of cyber divisions, the need for consultants are more and more pressing, not merely on the Cyber part, but on the price-tag setting. That part could need addressing quite soon and that is where we find that EY cannot vie for such clients as they just told 3000 people to vacate the building. That I how I see it, but I could be massively wrong here and I am not an accountant. And when you see that Accenture is ridding itself of 19,000 jobs implies a larger failing all over the field. In 2003 Telia shed thousands of jobs, as far as I can tell they never rose to the old Telia, but that was merely me seeing it as I personally saw it. Is it the wrong thing to do for EY? I cannot say, but to shed 3000 jobs in the US implies more than just Economic downturn, it implies that they are already losing customers and long term projects, or they aren’t gaining long term projects, which implies that there is another issue at EY, not merely overcapacity. Yet, this is a personal view on the matter and I have no idea on how they could solve it, but as I see things around me I wonder what consultants are doing not merely to get the job done, but how to get new clients and that is the stage for the next article, because the story I wrote on February 24th 2022 ‘Red Flags’ gets a new lease on life. About that more in the next article, lets see if people actually learn from their mistakes.
Have fun (I will)