EY has laid off more than 50 staff members, including partners, in response to reduced revenue from federal and state government contracts following the scandal related to PwC tax leaks, reported The Australian.
This includes the disbandment of EY’s entire Future Friendly team, and its health services group.
The move comes as all members of the big four accounting firms EY, KPMG, Deloitte, and PwC have experienced a decrease in public sector contracts since the PwC tax leaks incident in 2022.
That event, which involved unauthorised sharing of confidential government information by PwC, prompted scrutiny over the level of consultancy spending and transparency in government procurement.
In the aftermath, PwC sold its government advisory division, now operating as Scyne.
Although Deloitte, KPMG, and EY were not directly implicated in the scandal, they have also been affected by a shift in government procurement practices, the report added.
Public sector bodies have increasingly awarded contracts to smaller consultancies such as Nous, FTI, and KordaMentha.
The Future Friendly team, a 40-person unit led by Nick Gower and Jon Christensen, joined EY in August 2023.
Future Friendly’s client base included Commonwealth Bank of Australia, Service NSW, Victorian and ACT governments, and Defence Health, with a focus on app development.
At that time, Grant Peters, the financial services managing partner of EY for Oceania, said the acquisition would “enhance” the company’s capability to offer clients “deep industry knowledge and technical experience they need to address their biggest transformation challenges.”
When asked about the job cuts, EY said it reviews operations “regularly” to ensure its “business and workforce remain aligned with market conditions and client needs.”
According to EY, less than 1% of roles across its Oceania workforce were affected.
Source – https://www.internationalaccountingbulletin.com/news/ey-axes-50-jobs/?cf-view