EY slims workforce for first time in 14 years

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EY trimmed its global workforce in the past year as a slowdown in demand for its consulting services led the Big Four firm to post its weakest revenue growth since 2010.

In an annual report published on Thursday, the accounting firm said it employed 393,000 people at the end of its fiscal year in June — about 2,450 fewer than the previous June and the first time in 14 years it has cut headcount.

Revenue across the business was up 3.9 per cent on the previous year, stripping out exchange rate moves, to $51.2bn. The increase represented the weakest growth in 14 years and reflects the challenges facing the Big Four firm, whose clients have been curtailing consulting projects and putting pressure on fees.

EY’s consulting business, which accounted for $15.6bn in revenue, grew just 0.1 per cent. There was also a sharp slowdown in growth at EY’s strategy and transactions business, which advises on mergers and acquisitions, where revenue increased by just 2.3 per cent.

“Over the past year, EY teams have demonstrated extraordinary resilience in a challenging economic climate with growth across all service lines,” said Janet Truncale, who became EY global chief executive in July. “This resilience is driven by sustained investment through a broad spectrum of services, such as leading AI and tech.”

There was faster growth in other core areas of the EY business, including in tax and assurance, which includes the firm’s audit work.

Under Truncale’s predecessor, Carmine Di Sibio, EY had been planning to spin off its consulting and tax advice businesses as a separate public company. The aim was to free consultants to sell services to EY’s audit clients, boosting growth that was being held back by conflict of interest rules designed to protect the integrity of audit work.

EY’s weakest performances were in Asia, where professional services firms are contending with an economic slowdown in China. Its Asia-Pacific region recorded flat revenues of $7.2bn. The firm grew 2.7 per cent in the Americas, its biggest region, and 6.9 per cent in Europe, the Middle East, India and Africa.

Although total headcount across the world only fell 0.6 per cent, job cuts in some practices will have been more severe. EY reduced headcount in its tax, consulting and strategy and transaction practices, and hired more people in assurance.

Deloitte also posted its weakest annual revenue growth in 14 years when it released figures last month.