

As I mentioned in my Twitters on Thursday, I had the opportunity to speak with Deloitte’s National Director of Public Relations, Deborah Harrington, on the phone earlier.
Deborah, who mentioned she had been responsible for public relations for FASB before coming to Deloitte,
has communicated with me via email about the blog before. She represents the only one of the Big 4 who has acknowledged this blog and the fact that some folks are reading it. Her willingness to talk on the phone today is a sign of transparency and willingness to engage that is good to see and is also demonstrated by Deloitte’s efforts to engage in
Social Media.
At least they’re trying.
Ms. Harrington responded to my email asking about the authenticity of the story below that appeared on the Dow Jones Factiva site. She asked me to call and we spent about twenty minutes on the phone. She thought that the reporter had asked her for a statement because of my
blog post on Monday.
She sent me a more succinct statement that she said was more accurate than the story below. In particular, we talked about the fact that the reporter wanted to compare these staff reductions to prior years. But the problem is that this kind of openness and transparency is new. There are no publicly available prior year numbers to compare this to.
As I have said before, in particular with regard to
the layoffs at PwC in February that have continued since, the Big 4 do not like to talk about cuts. They have a habit of reducing staff surgically, in
a thousand little cuts, across practices, geographies, offices, so that each person thinks they are unique. Those cut are often made to feel inferior and a failure, as most often the cuts are characterized as
performance related and a result of forced ranking techniques. I also see the survivor rationalization too – when survivors
dis’ those cut by saying they just “couldn’t make it in the Big 4” or they were “dead wood.” Helps cut down on ongoing morale problems when the remaining staff feel more secure, safe, because they think they are superior.
Ms. Harrington made it clear on the phone, and in her statement, that the vast majority of cuts were based on the negative economic reality the firm is facing. What’s frustrating to professionals, both those cut and those left behind, is
why the firms are not better at planning and forecasting.
Ms. Harrington’s official statement is as follows:
I
n a move to align its workforce to better reflect business and client needs, Deloitte LLP is taking a number of steps to reduce costs, including adjustments to its workforce levels in the United States. The cost-containment program is taking place across all support functions and client service units.
Part of the plan is to align our headcount according to current and projected revenues. Like our competitors, we are affected by a number of economic events, including the overall slowdown in the U.S. and global economies.
It’s refreshing when one of the Big 4 admits that they are as vulnerable as their clients to both an economic downturn and other forces outside their control. It may not make those who have been let go feel better right now (and they are commenting), but it should help them when looking for a new job. What is disappointing is when the firms don’t manage what is within their control – recruiting, commitments to new hires, commitments to H1B visa holders,and commitments to tenured employees and those whose performance has been rewarded in the past but are now in the wrong place at the wrong time.
Ms. Harrington said that some employees were offered other positions, including opportunities to relocate. She also said that
Deloitte has not rescinded any offers to students and has no plans to do so. They are still recruiting. She also listened to my comments about the difficulties that
H1B visa holders have when they are suddenly let go and said she would make management aware of my concerns. I get a lot of mail about Big 4 firms cutting H1Bs first and most severely. They have a legal responsibility to these employees that goes beyond what they do for others. Are they upholding their obligations and making employees aware of their rights?
By all reports, Deloitte has severance programs in place and is doing the best they can for employees under the circumstances. But it’s the circumstances, and why they could not be better anticipated and managed, that we have an issue with, Ms. Harrington.
Please let your firm know they are expected to be smarter than that.
************************************************************************************
This news story is currently only available via Factiva, the Dow Jones news service for corporate subscribers. It is not showing up on WSJ or anywhere else that I can find.
27 August 2008
8:27 PM GMT
Dow Jones News Service
English
(c) 2008 Dow Jones & Company, Inc.
(Updates spokesperson’s comments in fourth paragraph and adds comments from recruiter starting in the sixth paragraph.)
DOW JONES NEWSWIRES
Global accounting firm Deloitte & Touche LLP this week began layoffs that will reduce the 45,000-strong U.S. staff by “slightly less than 2%,” a company spokesperson said Wednesday. Layoffs will occur across all departments and offices of the firm.
“Part of the plan is to rightsize our headcount according to current and projected revenues,” spokesperson Deborah Harrington said in an e-mailed statement. “Like our competitors, we are affected by a number of economic events, including the overall slowdown in the U.S. and global economies.”
Harrington said Deloitte, like many other financial services firms, reduces its workforce annually to “meet the needs of our clients,” but did not say how this year’s cut compares to typical downsizings. While some of the reductions are based on performance reviews, Harrington said much of it is part of a cost-cutting measure.
Harrington said the firm is hiring in other departments and said the U.S. staff at the company has increased by “several thousand” over the last few years.
“Its hard to draw any broad conclusions from what Deloitte is saying, as it relates to the rest of the industry,” said Jon Zion, president of eastern US operations for financial-services recruiter Robert Half International.
With unemployment in accounting services around 2% – compared with the 5% national unemployment figure – the broader economic slowdown has not weighed as heavily on accounting industry jobs as it has elsewhere, Zion said.
“Up until this point, we are not seeing any pattern of workforce reductions” across the industry, either in the private and public sectors, Zion said.
-By Kejal Vyas, Dow Jones Newswires; 201-938-5460, kejal.vyas@dowjones.com [ 08-27-08 1627ET ]
The smarmy and dishonest “smartest guys in the room” approach to layoffs by Deloitte is what really chaps peoples asses. Chuck Daly, former Detroit Pistons coach was once quoted as saying “There are two groups of people you cannot lie to: children and NBA players”. You can add to that Deloitte employees (both former and current). Dear Mr. Straight Talk, please practice what you preach. Also, please take a look in the miriror and maybe call to the carpet some of your “leaders” who are responsible for many piss-poor decisions, sloppy management, cut-throat culture, etc and please stop hiding behind “the bad economy” excuse (which is only part of the story).
Same for my DT office as well. Plenty of work to go around at this point. We are actually seeing some wins come in from the marketplace…which for quite a while was not happening. This has been very good for moral…we needed it.
Good, 452. Uncle “D” will then pay double the price to hire back (if they can) the talents they dropped. Those willing to return will work so hard for Uncle “D” the second time around, because they know how Uncle “D” rewards its top performers. Uncle “D” will either have to raise rates or the partners will bear less profits on those engagements. I bet against the latter. The clients won’t pay the extra fee, so Uncle “D” will play the same type of dirty bogus game to ramp up the invoices. Since Uncle “D” has increased the number of “friends of Deloitte,” it will be so much easier to market and win. Now, who can argue against this formula for success? Not any of the remaining partners.
By the way, if you are one of the one’s being targeted by Deloitte for layoff this round, where they are playing dirty mind games with you to convince you that it is better for you to resign, DO NOT RESIGN. Stay on and make them pay your severance. In this economic environment, companies understand layoffs, especially if you are from Deloitte. If things do not seem right, get a PLAINTIFF’S (translation = cannot be bribed by the firm) attorney to watch out for you. Deloitte plays dirty games (has played dirty games for years), and you should get help.
A little bird has told me that Deloitte Tax continues to quietly strike deals with individual partners/others at the moment. Some tax partners are being demoted, while others will “resign” and take 1-2 agreed upon SMALL clients with them. The 1-2 agreed upon clients will be one’s that the firm claims are no longer worthy of being served by Deloitte. Keep an eye out for supposedly partner “resignations” before the end of June. Those departing under these terms will still technically be subject to the firm’s non-compete provisions (excluding the agreed upon clients) and non-disclosure clause. They are allowed to tell their clients that they have separated from the firm, but any more detail would be a violation of their agreement. So, Deloitte continues with its abuse, but has managed to contain the continuing trashing of its name.
In order to perform a “quality job” more and more qualified auditors are needed @ Big 4 – not less. Most of us knows that. Just saying aloud and clear.
http://www.cfo.com/article.cfm/13612963
@453 – assuming I had an alternate option (aside from unemployment!), even a substantial raise from DT would not entice me back. I suspect a lot of others feel the same now they are out of the door.
After 8 weeks separated from D, received 2 offers today and both are better than paid by D and better positions too. Except the 6 weeks of vacations, but I negotiated the 4 weeks. Life is still going with or without D. Talked friends left behind, they are so much stressful to hang-on for the pay checks an visa status.
I heard the layoff for ERS on the West Coast has started last week. Some managers and senior managers have received the letter. But they did it very quietly. I am sure the same thing will be done in other offices as well.
Also, don’t be surprised that some of your partners and directors will disappear mysteriously after 5/31… they are also doing it very very quietly…
D can’t continue the “bleeding” anymore instead of taking a decisive action. If the situation were last another year, many employees, who remain, may end up with stress mental disorders and it would cost D’s quantity and quality of works, as well as medical related bills. Actually those fired or laid off people would have an unexpected benefit which is being liberated from the stressful environment. Even though, they are facing unemployment and job search, it is still better than waiting for .,.. inside D.
Year End Thoughts – Nick Tomassino – email 5/12/09
Re YE Talent Survey (previosuly global people committment survey)
“Though the results are loud and clear, the numbers can’t really capture the dedication and commitment I witnessed on my engagement and office visits this year. Naturally, there is opportunity for improvement, notably in career-life fit and rewards & recognition – two areas that surely suffered because of the tough economy. But know this: Your AERS leaders are extremely grateful for and proud of the immense effort you are making. My hope is that soon we will look back on this moment and say with pride taht we succeeded in the face of tough odds. So, thank you for all you have done.”
In trench speak, yeah we know your career/life balance sucked and we didn’t pay you – but we’re grateful and proud of you. haha
well, my career-life fit is better now (I have no current career to fit into my life!) but I could certainly do with more rewards and recognition at this moment in time….
Any news on the next round of year end chops yet?? hoping the folks I know there are still in good shape…
@447-
What region/office are you in? Our office has only one partner, so I assume he is safe.
If more reductions are to be done before fiscal year end, then I’d guess May 21st would be a good date as any. They wouldn’t have to compensate for Memorial Day, and since a good chunk of people take the Friday before off, that Thursday becomes a good date as any.
If they happen after, you’ll probably see the usual bleeding.
More cuts in my office today. 4 first year staff.
@465 – D’s making room for the new Sept (or whatever deferred date was agreed to) hires. They don’t want to rescind offers and ruin their relationship with the pipelines (i.e., the schools). Someone should call the schools and alert them to this practice. Professors who advise students about career options should have all the facts, not what simply what D wants them to believe.
@465 – What office or if you don’t want to disclose the office which region? Also what is the size of your office?
Any updates on the payment of ’09 bonus?
The rumor, which has been passing around for awhile and very intensified recently, that a major round of layoff which comparable to the March round would happen in the next several weeks, especially in the end of May. Does anyone here have further information?
As a may grad going to work in big4, some interesting observations of my fellow new hires:
1. Nobody has any idea of the current state of the firms. hardly any new hires try to find out anything– its hard to do with no mainstream coverage and the hear-say in blogs is taken with a grain of salt. (Early professional skepticism!) I’d assume so long as the schools aren’t raising the alert level, the majority of top accounting students will still make their way to Big 4 if for nothing else than higher pay.
2. Many are on accelerated plans to pass the CPA. I know several who will have passed the exam before we begin sometime this fall (dec. grads). Many, myself included will have passed 2-3 sections before starting. We hear that many of those laid off had not passed the exam, and so it seems like a good way to keep our jobs. This “educational arms race” may be good for the firms in the long run.
Thoughts?
@470:
1) Accounting programs & school career centers need to have good job placement statistics. It’s quite easy for firms with large recruitment and marketing budgets to spin the “experienced” crowd as embittered, or a bunch who “couldn’t cut it.” Professors who still practice, and have nothing to lose, are quite happy to share what they know, like the rest of us do on this blog.
2) This “educational arms race” you describe may likely be applicable from the just-graduated level and maybe up to the early senior levels. As this crowd advances to the upper senior, manager, senior manager, and director levels (most of whom have passed, have a lot of technical and industry experience, and some sales experience), the firms/partners boot many of ’em out and start all over with the cheap just-graduated crowd again.
A good safe harbor in the Big 4 is not to get on any “shit lists” – i.e. not being a CPA, not being compliant with various “check the box” requirements, etc. That combined with decent performance eliminates you as “low hanging fruit” when they go to do layoffs. Nothing truly makes you safe, but it is really easy for them to see someone who isn’t a CPA and isn’t in with all of the bureaucratic details as a headache to get rid of.
@470, I love how you call passing the CPA an educational arms race. So what happens after you pass it? What’s the next big thing? The partnership doesn’t care if you have a MBA or any other tertiary education. They might even actively discourage it since they want to pigeonhole you into one area to develop “expertise.” The arms race is more like a 40-yard dash into a wall.
@412 – I could not agree more with ALL of your comments. As an ex-DT, I have experienced the same thing and it’s been a truly rewarding and RELAXING experience.
heard atleast 15 cuts at DT northeast AERS over next few days – not confirmed though, but watch out….
Rumors are intensified for a May-June layoff. Especially, some normally quite Senior Managers are joining in. I looks something real would happen.
Passing the CPA should be more for your career and not for one of the Big 4.
Even if you pass the exam, it will not ensure you a job. Myself and many others were laid off who had passed all four parts of the CPA.
Best of luck to New Hires and Current and Former Employees!!
It’s a total guessing game, but I don’t think passing the exam will save someone if that’s all they have going for them. It’s more a hurdle that must be passed or otherwise they will use it against you as a 2nd or 3rd year. I guess if they are down to a few people who are otherwise the same, the person who has passed the exam might be allowed to stay, but I don’t really imagine that kind of situation happening in reality.
From the “glass half full” perspective, our office is having an end of busy season happy hour this week. I can say that the staff was pleasantly surprised at the modest perk. It does help with morale
To whoever posted that BS article about Plante & Moran’s layoffs, quit dreaming. They are absolutely known to have the same cutthroat approach, kill em off approach as any CPA firm. They have been shedding “underperforming” partners for several years. They just don’t get the press that the national firms do. How much clearer could it be that they simply released that statement to make them sound like the caring, family friendly firm they were in 1985? Their spin machine is alive and well.
The rumors about the D&T layoffs are true. I got canned today along with a number of other unlucky ones. The Firm’s fiscal year end is coming up next week and they wanted to get this done before the beginning of the new year. From what I can tell this round of cuts was comparable in size and scope to the round they had just two months ago in late March.
The good news is that they did provide a decent severance package and they handled the layoff process professionally and with courtesy (no being escorted out the building or hurried out the door), they let me leave at my own pace and I was given plenty of time to inform colleagues, clients and gather up any personal files.
The bad news is that I doubt that this round of cuts will be the last. From all my talks with partners before I left today it seems that everyone expects more cuts to come in the not-so-distant future. I wouldn’t be surprised to see another round of layoffs come late August (promotion time).
@481 – Philip J Fry, Sorry to hear about this! Glad you didn’t get the bum rush to the door. Do you think this was a result of forced rankings / ratings distribution?
Thanks for the sentiment bender. The people who were cut today, myself included, had good ratings and were well regarded. But after you get rid of all the 4’s and 5’s and you still need to cut some more, well then the 3’s become the next in line for the chopping block.
Good luck. Hope your next job is in a better environment. Glad they handled things in a professional manner.
At my PWC office they’re still doing the security guard bit, but I guess they’re still claiming the staff reductions are performance based.
Philip J Fry — why would partners tell you they were planning another cut?
@481 – Philip J Fry, hopefully you take another thought of this. It may be end up better than hanging there and waiting for the ax. I was let go in March. I have been enjoying staying with my family and done a lot of house work, which I did have time to do. I have also been enjoying the job searching, which let me know many new people and refreshing my skills. I found a good job and will not start until next month when my package runs out. Good luck.
@485 – to clarify, when I say partners had hinted at more cuts to come I’m not talking about any formal announcment from some big shot in a leadership position, I’m referring to those partners/directors/sr.managers that I’ve known personally who speak frankly and off-the-record. They don’t know for certain that there will be more cuts, but their general view of the situation based on their own understanding of the state of the firm (and they’ve been pretty accurate in the past) is that headcount reductions and other cost-cutting measures are not over. Until this recession ends expense management will be high on the agenda and employee compensation is the biggest expense they have.
I have been posted on this blog for a few times and mentioned that the layoff in May was coming. And I can tell you, it is far from over. There will be more layoff in Aug/Sept, and there will be more toward the end of year. The timing and size of layoffs will vary from group to group, office to office and region to region.
The senior leaders at DT are the most incompetent management I have ever seen. During this economy downturn, they have absolutely NO idea what to do other than getting rid of their people. If you have read this blog and almost 1000 comments about DT layoffs, did you ever wonder what the hell those senior leaders have been doing for the past one and half year? Is it the time for some senior leaders to step down? Barry and Sharon, it is time to have some real straight talks with your senior partners…
I received a meeting invite to meet with the HR and a partner tomorrow morning. I guess my time as come for Deloitte.
Based on my personal experience, I concluded that it was definitely an eye opener. It was a pleasure meeting so many great people in this company but unfortunately it was cut short. However, the experience I gained definitely tell me that Deloitte (or maybe Big 4 as matter of fact) is not suitable for me. The reason is, I am an auditor and my best interest is to ensure compliance being practice and to create efficiency whenever I can. In this case, ensuring compliance is based on the budget and efficiency can cause you to have lower utilization (since you’re so fast, we don’t need you anymore. Please sit on the bench and wait. Thank you). I honestly do not see a logic in that.
I am not going to be sad, but I am going to stay strong and be positive about myself. It is not the end of the world, but a beginning of a new chapter in life. I probably need to work with a team that practices better compliance efforts and also appreciates my efficiencies. I am thinking DCAA since they’re so stringent with audit and PCAOB since I am so detail oriented and ethical. 1 is 1 and 0 mean 0.
To those that were/going to be affected by Deloitte. It is not the greatest place to work anyway, so be happy. At least we a great severance package and also an opportunity to venture somewhere where we will be better appreciated.
To new hires, good luck. I have been working/networking with higher management in Deloitte and I can tell you that they have no idea, direction, compassion for you/audit/compliance/anything else in the world but money. Trust me on that. I know.
BTW, thanks for all the tips on what to do after the layoff. I am going to enjoy life, continuosly look for jobs and be happy. Life goes on, eat now – Garfield.
Very well said…all the best of Luck.
And to all those out there that may have been cut,are anxious about where and what to do,take heart,the UNDERDOG does win too.For those into popular culture and TV,Tuesday and Wednesday night saw the UNDERDOGS win.
Enjoy!
I was layed off from D&T in March. I have always performed well 3s or higher. Upon returning from maternity leave last year, I requested to go on flex time (work less hours) and got flat out denied. The reason (“we generally do not let seniors on flex”) I knew several ppl that were seniors when they started their flex. I was shocked needless to say, cause this is a very common benefit when recruiting. A few weeks later I was called in to see the partner who claimed I was not performing up to expectation, what the heck!! That was the first time I had heard thisfrom anyone (my clients love me, the managers always say I do a great job). Upon asking for more details he just said that there is nothing specific, its just comparing me to my peers, I was not on the same level. What a lie!! Anyway, a few months after I was called to the partners office again and was told I was being laid off due to the economic downturn. Luckily he did not mention anything about performance or that would have pissed me off. I cannot believe the company I so loved when I started 4 1/2 years ago has turned to one I so ate and am disgusted by. I know I am better off, but I hope ppl will not fall in the same trap I did. (oh and did I mention I was african american).
It looks that this time is real after a quite 2-3 months. Be careful and good luck to everyone. It is better to prepare the worst.
It looks that D will use the year end review as the tool to achieve the headcounter reduction. What they are going to do is that you will artificially push more employee to 4s and 5s ratings by a quota system. Then they can fire those 5s with low or no separation packages. Then put those 4s onto the PIPs which is so stressful and hopeless, those most people on those will quit anyway. It is a shame.
I think this string needs another start – it’s almost at 500 & the word is out that layoffs have started again (maybe the owrd should be more like: they never stopped). I just heard of an entire department being realigned.
@494
Can you provide more details re “an entire department being realigned” as long as you feel confortable. Thanks.
Hey – can everyone take a reality check on performance ratings – if you get a 4 or a 5 @D then you are already underperforming to the point where I have a hard time understanding why you still have a job. Better yet, why have you had a job for the past year, because, let’s face it, no one just becomes a 5, it’s a long term state of mind.
Next in line is all the complaining 3s. A 3 means you are average, period. You are not a standout. You are not exceptional in any way whatsoever. In fact, all you are doing is showing up, mostly on time, but possibly not, and just working. Not doing anything extra – not going the extra mile.
Now that we have that straight why you got the performance rating that you did is a completely different question. Perception, politics, backstabbing and a host of other reasons all contribute to your performance review rating.
Then there is the formula: there can only be one 1 per engagement and where a partner has multiple engagements they are only allowed a certain number of 1s in total. On top of that some of management uses the performance review in order to bypass the year-end rate increase so you could lose out on becoming a 1 if your management wants someone else to get a bigger raise then they would if they were rated on their actual performance.
So there it is, or at least most of it.
Your rating review designation is only a number that someone gave you based on their agenda, not yours, which I assume is career driven.
@491
It is very typical behavior for a large company especially when it is a down turn. It is because that most people were spoiled when it is a good time and lost competitiveness, When the economy turns downhill, people are desperately protecting their job and their life styles. The only way they can do it is to push out others. It is why people suddenly changed so much.
@494
I agree that and this string is too long already. It would become much longer in next several weeks.
I agree on closing this thread. Please post comments and updates on the Deloitte latest layoffs/RIFS to
https://francinemckenna.com/2008/09/deloitte-the-worst-may-be-yet-to-come/
Thanks so much to all for your participation. You are providing a valuable service to each other.
🙂
Francine