EY's US branch has acknowledged its decision to lay off approximately 3,000 employees. In relative terms, the "Big Four" , this represents less than 5% of its local workforce. An internal memo describes the decision as "difficult but necessary," given "the headwinds facing our business." Indeed, according to this document, the job cuts will primarily affect consulting, in strategy, transactions, and human resources. An EY statement to the media assures that "this decision is part of the day-to-day management of our business and is not the result of the recent strategic review known as Project Everest," a plan to separate the consulting and auditing practices . This return to the status quo allows proponents of the multidisciplinary model .

While auditing is often perceived as a slow-moving activity, it nonetheless offers the advantage of recurring revenue due to regulatory requirements, whereas consulting revenues are more volatile. This is evidenced by the "headwinds" experienced by EY: while the pandemic initially boosted business, leading to the recruitment of numerous consultants, the euphoria was short-lived, for example in mergers and acquisitions consulting with rising interest rates. Despite preventative measures to limit the extent of job cuts, an internal EY memo argues, "we must now act as dozens of other firms have done in recent months ." KPMG has reportedly decided to reduce its workforce in the United States by 2%, and Accenture and McKinsey by nearly 3% globally.

Read also: Auditing and consulting: the temptation of a split

But what about the atmosphere on this side of the Atlantic? "I'm not sure the climate in the United States, symbolized by the layoffs announced by EY, will be reflected in France," says Harold Valat , a partner at Vauban Executive Search , a headhunting firm specializing in financial services. "There's such a skills shortage here; the market is structurally deficient," he explains. Audit and consulting firms "are already struggling to recruit; they're no longer a prime career path, and they simply can't afford significant waves of layoffs .

In light of EY's announcement in the United States, the issue of employment in consulting "is a topic that's starting to worry many of us," confides an executive at one of the Big Four consulting firms in France. And "it's possible that this will affect our country, but in a targeted way, focusing on certain areas of expertise," he believes. For the time being, this consultant clarifies, no job cuts are planned in France, including at EY. However, he acknowledges: "We're starting to feel that we're at the peak of a cycle ," even though his firm is "still very confident about short-term growth prospects .

Natural losses

Big Four executive , the employment situation "is still exceptional; it always lags behind economic activity ." Today, firms "prefer to invest in retaining certain talents, for fear of losing them when business picks up again ." The consultant says he is currently being courted by several competing firms and is "in a strong position" : "I've been offered more than I was asking for."

Harold Valat , at Vauban , notes that both auditing and consulting "constitute a formidable hunting ground for us, a deep pool of talent; firms are often a training ground for talent sought after by the corporate world after a few seasons ." Firms are therefore suffering significant losses, especially since, naturally, very few young recruits will end up as partners. In its internal memo acknowledging the coming wave of layoffs, EY nevertheless cites, among the arguments, a "high employee retention rate ," as if the Everest project hadn't sparked too many desires to leave. Finally, observes the Vauban , these losses are exacerbated "because talent is increasingly hampered by the fact that, very often, decision-making centers are Anglo-Saxon; France is not the center of the world ." Nor is it immune to waves of influence coming from across the ocean.

Benoît Menou , journalist at L'Agefi.
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