Big 4 firm EY announced it is laying off dozens of U.S. partners, The Wall Street Journal reported this week, following KPMG’s layoff of about 5% of its workforce, including partners, this summer.
Laying off partners is a rare occurrence, as firms normally buy out the partner’s equity plus make another payment based on the person’s seniority and tenure when they leave.
The Journal reports that the Big 4 depend on consulting services for 43% to 66% of their global revenue, but demand has lagged expectations. Many consulting operations added staff during the pandemic with the idea that companies would seek help adapting to new business models, consultant Allan Koltin told The Journal. Additionally, high interest rates slowed private equity deals and others, and clients shelved plans for advisory services. “In 2023 especially, the number of deals being done everywhere declined, and that led to a material impact for many consulting firms,” Koltin said. “That includes transaction advisory work, due diligence assignments and quality of earnings reports.”
