Is Big 4 Layoffs their employees? Yes, Big 4 announced laying off thousands of its employees one after another this year.
It is reported among Big 4 financial consulting giants. Deloitte is one of the groups that announced mass layoffs after EY. It is revealed that over 4,200 employees were set to go out of jobs this year. Two of the Big Four financial consulting firms announced this mass layoff.
These groups can be the best options for those looking to begin a career in accounting. It offers people to build a career in professional services.
We have curated this blog for you to answer your questions regarding the Big 4 Layoff…
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Will Big 4 Layoff Employees?
The Big Four consists of four big companies. Deloitte became the second largest among the four financial consulting giants. It announced job cuts in 2023.
The firm is headquartered in London. In 2022, it was reported to generate annual revenue of around 59.3 billion U.S. dollars. That forced the company to cut around 1,200 jobs throughout the United States.
Initially, the job cuts were announced by one of the biggest firms of the Big Four, i.e., Ernst & Young. It announced cutting jobs and laying off nearly 3,000 employees in the United States.
After the layoff announcement made by Ernst & Young, Deloitte announced the same.
According to reports, Deloitte cut jobs, and it would lay off 3 percent of its total workforce.
Let’s check how many employees are laid off at each group of Big Four. Deloitte announced laying off 3,000 employees in the United States. It means the company is reducing 1.5 percent of its workforce. In February 2023, Ernst & Young and KPMG also announced layoffs.
KPMG job cuts affected 2 percent of its total number of employees. It is believed that all the employees were from the U.S. side. Ernst & Young affected 5 percent of its total workforce at that same time in 2023.
It is reported that Deloitte’s U.S. headcount expanded from 2021 to 2022. It is estimated to be 65,000 US headcount to 80,000 US headcount respectively. It all happened when the effect of the Coronavirus pandemic began to decline.
Moreover, other firms started to hire employees as the effect of COVID-19 declined.
Although, the layoffs were taking place in every industry. But the layoffs in those Big Four groups have been in the spotlight for months as each firm announced mass layoffs in 2023.
Besides, large-scale layoffs were also announced by several other corporate centers. It includes Opendoor, Whole Foods, Meta, and many more.
It is believed that Lyft Inc., a San Francisco-based firm, also declared mass layoffs on April 21, 2023. However, no declaration of how many employees would be affected then. Those aware of these layoffs revealed that more than 1,200 workers were at stake. They were set to lose their jobs during these mass layoffs.
The year 2023 has proven to be the toughest year for several companies. This year has been proven to be economically difficult. However, tech companies benefited this year while other industries were badly impacted.
Consulting firms are also included in a list of those companies that have suffered. This is the biggest reason the Big 4 is doing the same. Now, it is also announced to lay people off.
Moreover, the consulting firm is the one that lays off more employees than other firms. These layoffs in consulting firms are related to M&A and private equity activity. Due to this, the investment process has been slowed down worldwide.
In short:
- In April 2023, Ernst & Young (EY) laid off 3,000 employees nationwide.
- Deloitte laid off 1,200 employees behind EY in April 2023.
- In February 2023, KPMG announced laying off 700 employees in the U.S.
- In May 2023, Grant Thornton laid off 300 workers across the country.
If we check PwC layoffs, no official statement has been released. Still, the rumors have been there that PwC will lay off employees silently.
Ernst & Young (EY) is laying off more employees than other companies. Deloitte also announced mass layoffs, but it is not higher than EY. The primary reason for EY’s mass layoffs is the company had a failed break-up plan.
Due to this, it decided to lay off a larger number of its workforce. This move has also occurred because EY wants to compensate its partners well.
About The Big 4
Big 4 are the world’s four most popular and largest professional services networks. It includes:
- PwC (PricewaterhouseCoopers)
- Deloitte
- KPMG (Klynveld Peat Marwick Goerdeler)
- Ernst & Young (EY).
All these four networks are accounting networks and the largest in the world in terms of revenue. Not only in terms of revenue but also in workforce, these four are categorized in the largest network.
They all are comparable in size as compared to other groups of the market. All four groups offer equal opportunities for professional services to their clients.
All of them are interesting networks to work in as they all engage with Fortune 500 companies.
Let’s put light on what services the company offers to its clients:
- Assurance
- Taxation
- Management Consulting
- Audit
- Market Research
- Actuarial
- Corporate Finance
- Legal Services
- Valuation
Both the private and public companies’ audits are conducted by Big 4 companies. It is estimated that a significant majority of audits were from public companies. At the same time, many audits were from private companies.
Big Eight initially dominated the market for professional services. Big Eight consists of eight big groups, including:
- Arthur Young
- Coopers & Lybrand
- Arthur Anderson
- Ernst & Whinney
- Price Waterhouse
- Touche Ross
- Deloitte Haskins and Sells
- Peat Marwick Mitchell
Later, the group Big Eight was reduced due to mergers. In 2022, Arthur Anderson collapsed and was left with only four networks. The four networks are called the Big Four and now dominate the market at the turn of the 21st century.
In 2011, it was noted that the Big Four audits 99 percent of the companies in the FTSE 100 Index. On the other hand, It audits 96 percent of the companies in the FTSE 250 Index. The Big Eight broke up into Big Four due to the index of the leading mid-cap listing companies.
For example, it had a high level of industry concentration that caused concern. Moreover, some are in the investment community for the U.K.’s Competition & Market Authority (CMA).
Why Is Big 4 Laying Off Employees?
EY scrapped Project Everest. So, the company decided to separate its auditing and consulting divisions. It announced mass layoffs due to “overcapacity” in its company.
It is reported that this layoff move impacted those from the consultancy side.
KPMG announced laying off 5 percent of its US-based employees after struggling financially. The company’s spokesperson said, “Due to economic headwinds. It is coupled with low attrition.”
Several firms cut down the U.S. headcount to batten the hatches to streamline the structure.
Which Big 4 Is Most Prestigious?
PwC is considered the Big Four’s largest and most prestigious company. Among other firms, PwC is the most famous firm in the country.
A London-based firm generated revenue of over 35.4 billion U.S. dollars. It has 208,109 total employees. It is a strong, established audit client base company.
Deloitte is the second-largest firm in the Big 4. It generates more revenue from consulting than audit services. It is headquartered in New York. The firm employs over 225,000 employees and generates over 35.0 billion U.S. dollars in revenue.
In terms of staff members, EY is the largest one as compared to other firms. It is headquartered in London, UK. It generated more than 28.0 billion U.S. dollars; it had the fastest revenue growth among other firms of the Big Four. It has nearly 212,000 employees.
The smallest and most European-focused firm is KPMG. It is there to complement its audit work with its powerful advisory and consultancy side. KPMG is headquartered in Amstelveen, Netherlands. It has around 173,965 employees and generated over 24.00 billion U.S. dollars in revenue.
What Is The Big 4 Concept?
Big 4 refers to the four largest accounting companies throughout the United States. Each of the companies generates larger revenue than other companies.
Initially, it consisted of eight firms; the nickname was “Big Eight .” Later, its mergers declined several of its top-tier companies. That led to the company’s collapse from the “Big Eight” to the “Big Four.”
All four firms of the Big 4 company audit the financial statements of their publicly held firms.
The company offers several other services besides its auditing services. It also offers legal advisory services, tax consulting, market research, valuation, and assurance services.
However, the company employs a larger number of employees, but getting into the Big 4 isn’t easy. Jobs at the Big 4 firms are highly competitive and difficult to get.
Comparably, each of the Big 4 companies has a more strenuous busy season.
The Bottom Line On Big 4 Layoffs
However, The Big 4 is the group four largest accounting firms nationwide. It is true; the firm hires a large number of people.
On the other hand, it also lays off a larger number of employees. Moreover, these firms have their critics. Each of the firms offers great services and has a diverse staff armed. Each employee possesses great knowledge. Moreover, they are experts in their fields to satisfy their client’s requirements.
The company offers tax compliance services, financial advisory, audit, assurance, and consulting services. Besides, every firm helps with acquisitions, forensic accounting, mergers, and corporate restructurings.
On May 30, 2023, Besides, other companies, such as Goldman Sachs, also laid off employees 2023. The company laid off 250 more employees after laying off thousands of workers.
On May 24, 2023, another company Meta laid off 6,000 employees after its first round of layoffs. In its first round, Meta laid off 4,000 employees. The layoff was intentional layoff and a part of the strategy.
Last year, the firm Big 4 had more than 39,000 workers throughout the country. Later, Big 4 announced it would lay off employees to streamline its business.
