Newsflash – They’ve All Been Laying Off All Along
Apparently Deloitte is laying off somewhere between 150 and 200 1st and 2nd years…
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I’ve had to toss in a link to that to my earlier-written story.
I think accounting firms need to stop pretending. Don’t go onto college campuses and say, “we value our people,” only to lay-off the same students next year. I know of too many partners who have called associates “expendable” for me to believe in the campus propoganda machine. College recruits exist to support the churn and burn machine.
Francine,
Which functions have Deloitte been laying off “all along”? Audit I’ve heard, but any others? Some are calling it performance review related — likely a result of forced ranking. However, it is hard to sell something as performance related given the numbers being separated. Sounds like PR talk.
Hmmmm … how does the Big 4 get picked up on the best company to work for, women, diversity, etc. lists? Huge donation?!?
Deloitte, like the other Big 4 with the exception of EY as far as I have heard, has been laying off folks in audit and consulting since at least 2007. See comments on the following post for a comment and update from a reliable source on the most recent cuts before this latest round. https://francinemckenna.com/2008/04/big-4-partners-with-high-salaries-to.html. Also search for layoffs on this blog for many posts abotu PwC and others this year. Although “PwC Layoffs” is probably the number one search term behind “Auditing Standard 5” that brings folks to this blog, “Deloitte layoffs” as a search term is not far behind. (I see KPMG much less frequently and have never seen EY layoffs as a search term.) I take this as a sign that rumors of layoff are occurring or actual layoffs are occurring and people are looking for more information. In addition, I receive emails constantly about layoffs and cuts in the US at both Deloitte and PwC (and KPMG less frequently.) I have also heard that, notwithstanding what the PR says about results, Deloitte had a bad year this year. While trying to help a person who had been let go from PwC find other opportunities, I referred him to a friend who is a Director at Deloitte. We received this message: ” I would suggest you look elsewhere …Currently, Deloitte is not actively hiring and in fact, in many cities, there have been some reductions in head count. This has been a poor financial year, and the Firm is not optimistic as we look ahead to next FY.”
Francine, have you heard of any layoffs in tax, with any of the Big 4? Someone suggested that second tier firms have matrices that are better suited to handle the economic slowdown (e.g., lower rate per hour). Thoughts?
As an ex Big 4 Director what amases me is that people still believe the marketing recruitment bull that is fed out while people are being treated as pure numbers (pun intended)and hired and fired on the whim of so called market conditions and with no consideration for their feelings and career prospects. There is nothing more damaging than receiving good evaluations and then been axed the next moment. This is just not dealing fairly with staff.
I am a partner in a Big 4 firm. Each firm has just three things: our client relationships, our name and our people. We can’t stay in business without all three. And when people leave, they take with them our investment in them. This means we value and attempt to retain our top performers. Why would we do otherwise? Having said that, we are a for-profit business, and when business slows down, we are forced to consider layoffs, just like other for profit businesses. The accounting profession is not exempt from the downside of economic downturns. At the beginning of my career, I too was laid off and I know first hand what a tramatic experience it is. But that’s the way our economy operates. So I’m surprised people seem to think that the Big 4 firms should be held to a different standard in this regard, or that we don’t care about our people. That just isn’t the case.
@Anon 3:40pm
It’s the Big 4 that holds themselves to a different standard based on their lack of transparency with regard to layoffs. Rather than admit, as you have done, unfortunately anonymously, that business is down, forecasts are weak, or maybe planning was poor, the Big 4 cut people in a dispersed, hush-hush fashion and make those they lay off for economic reasons feel that they have failed.
I also personally believe that layoffs are not necessary. Changing your business strategy, realigning/retraining resources, improving forecasting and most importantly improving business development and competitive position are often necessary. All of these activities are harder than just cutting people. It’s embarrassing to see the Big 4 making cuts, a few at a time, dispersed, in the dark, undercover like the Colts leaving Baltimore, and while they are still selling a bill of goods to university recruits about the future.
https://francinemckenna.com/2007/05/layoffs-whats-your-excuse.html
In response to the partner’s post I’d like to offer the following, semi-rhetorical questions.
1. How much does your firm spend on branding? I’m thinking of the U.S. Open golfer with the KPMG hat, of tie-ins with the Masters, etc. Let’s not forget the salaries and fringes of the “Brand Managers” either. So how much of the firm’s profit in the for-profit accounting business gets spent on stuff that, arguably, doesn’t result in sales or even a tangible brand enhancement?
2. How much does the partnership spend on partner meetings, including sectionals, new partner “orientation”, line of service dinners, etc.?
I could go on, but I’ll show some restraint. My point is this: if this is really a “for profit business” then why is so much money spent on activities that aren’t investments in future profitable business? Where’s the stewardship or fiduciary obligation? (In fact there’s precious little because the partners are only responsible to the other partners, not to the employees.)
It seems to me that laying off staff is the easy short-term answer, while reducing discretionary (and arguably unwise) expenditures is the more correct answer. So sorry if it impacts the partners’ quality of life…
There is a news article that Deloitte is spending $300 million to build its own training facility in Westlake, Texas — complete with accomodations, restaurants, etc. If Deloitte can afford to do this, why would it layoff employees?