Big four consulting firm EY is planning to cut more than 100 roles next week, or more than 1 per cent of its 10,000-strong workforce, due to the persistent downturn in the advisory market.understands that the losses will mainly come from the consulting and financial advisory divisions with final numbers still being determined.
The big four firms are still grappling with the fallout of the PwC tax leaks scandal, which has led to a dramatic drop in their use by federal and state governments. In addition, private sector demand is also down, due to the slowdown in M&A activity and companies reducing or deferring their spending on external advisory services.The slow market has led to the larger firms, which had recruited heavily coming out of the COVID-19 pandemic, reducing staff numbers. Amid this, smaller firms have reported they are picking up more work, particularly from public sector clients.
Industry insiders had hoped that demand would return before Easter but now most do not expect any rebound to happen until July at the earliest.At the same time, some veterans fear that the downturn may be more protracted or may signal a wider resetting of overall demand for consulting services at a lower level.
These pessimists note that clients may stick with smaller firms, which typically charge less than the large branded firms, or may do more work in-house rather than calling in external advisers.