Consulting giants EY and PwC axe 570 staff in Australia

10 November 2023 Consultancy.com.au 3 min. read
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In a clear sign of the struggling market, professional services firm Ernst & Young is slashing 230 jobs from its Australian headcount, just one day after PwC cut 344 of its own.

The contraction of the Australian consulting industry is now in full view, with Ernst & Young following PwC in making deep cuts to its national workforce amid challenging market conditions.

Altogether, over 570 professional services jobs have been officially lost this week, while fellow Big Four firms KPMG and Deloitte had earlier indicated that dozens of redundancies had already been made. Scores of graduates have also had their start-dates deferred.

Consulting giants EY and PwC axe 570 staff in Australia

Having avoided an earlier round of wide-spread shedding at the beginning of the year, EY has now succumbed to the prevailing market pressures and will jettison 232 staff-members, the bulk of those from its financial services division, with a slow-down in M&A activity likely one factor.

The firm also cited a reduction in demand for public sector consulting, with the federal government making good on its pre-election promise to slash $3 billion from its outsourcing bill.

The local situation hasn’t been helped by the revelations of gross misconduct at PwC – which just one day earlier axed 344 staff of own – but the mass layoffs are also in line with global industry trends, with consulting firms having to contend with the ongoing business uncertainty brought about rocketing inflation and higher interest rates.

Among the most recent announcements, Deloitte and PwC are preparing to cut upwards of 800 jobs apiece in the United Kingdom.

At the local level, almost 1,000 Big Four jobs have been scrapped over the course of the year according to AFR calculations, or around 2 percent of their collective headcount. This includes the 200 management consulting redundancies at KPMG prior to March, and another 100 roles gone since, along with an unspecified number into the dozens disappearing from Deloitte. Their leaders don’t envision a significant turnaround until at least next Easter, maybe later.

“Clients are deferring investments and taking longer to decide to initiate new projects,” Deloitte CEO Adam Powick told the publication, adding that he didn’t expect the market to bounce back until around the middle of next year, but still wanted to avoid large-scale cuts to be ready for when the uptick occurs. “We’re taking prudent actions to reduce costs and protect our workforce. For example, we’re reducing hiring, down from 1,000 open roles to about 250.”

Meanwhile, EY Oceania chief David Larocca said that the cost-cutting measures the firm had taken – such as a reduction in recruitment and crack-down on expenses – had not sufficiently lowered its overheads, and so “the difficult decision was made that redundancies were required.” In addition, the firm has instructed its remaining staff to take the bulk of their annual leave over Christmas, and will join its industry counterparts in deferring a portion of its next graduate intake.

Earlier, it was reported that management consulting firm Bain & Company had delayed the first-quarter onboarding of around two dozen graduate recruits until as late as October next year, with those affected still in the dark as to their actual starting dates and unable to confidently pursue alternative interim arrangements.

It was also revealed that PwC had offered its own incoming consulting graduates $10,000 each if they agreed to a twelve-month deferment.