Bloomberg Tax
April 17, 2023, 5:57 PMUpdated: April 17, 2023, 8:00 PM

EY to Cut 3,000 US Jobs After Shelving Bid to Break Up Firm (1)

Amanda Iacone
Amanda Iacone
Senior Reporter

Ernst & Young said Monday that it would eliminate roughly 3,000 jobs from its US workforce as it pivots to address shifts in demand and “overcapacity” in sections of its business.

The cuts represent less than 5% of the US firm’s total workforce. EY described the workforce reduction as “part of the ongoing management of our business” and said it didn’t stem from the firm’s recent failure to implement a global breakup.

“After assessing the impact of current economic conditions, strong employee retention rates and overcapacity in parts of our firm, we have made the difficult business decision to separate approximately 3,000 US employees,” EY said in a statement.

EY US generates more than 40% of the firm’s global revenue and employs about 50,000 professionals.

Large accounting firms like EY typically lay off staff in the spring ahead of the June end of their fiscal years, but it wasn’t clear whether the latest cuts were coming in addition to those performance-based pink slips. The Big Four accounting firm did not immediately respond to additional questions about its downsizing.

EY’s cutback is just the latest in a string of layoffs among the firm’s consulting industry competitors—a sector that’s been hampered by slagging demand and too many professionals. Last month McKinsey & Co. said it would eliminate 1,400 positions and Accenture Plc said it would cut 19,000 jobs.

KPMG LLP, a Big Four accounting competitor, is cutting 700 jobs from its consulting business, it said in February.

EY’s top global leaders last week shelved a long-heralded plan to split off the firm’s consulting business and much of its tax practice to form a publicly traded company. The debt and equity deal would have provided one-time windfall payouts to audit partners, funded pension payouts for retirees and provided capital for the new company.

Since EY announced its restructuring goals last May, inflation and interest rates have risen rapidly, while the IPO market has crumbled, putting at risk the firm’s $100 billion enterprise value for the proposed new company, along with available funding to court the support of current partners and retirees.

Top partners disagreed over compensation and the resources needed to staff the remaining audit practice—a key sticking point for leaders of EY’s US affiliate, which ultimately opted not to take part in the deal. Just days after revealing it was abandoning the split, EY’s US and UK affiliates announced $500 million in cost-cutting efforts.

(Updates with background beginning in fourth paragraph.)

To contact the reporter on this story: Amanda Iacone in Washington at

To contact the editors responsible for this story: Jeff Harrington at; David Jolly at

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