The 2019 financial year at the Queen’s Ernst & Young would probably be considered below expectations. Revenue increased but only by 1.5% to £2.45 billion for the year ended June 30, while profits went up from £472 million in 2018 to £477 million this year.
EY’s transaction advisory services and tax businesses both had a decent year, with revenue increasing 9% and 8%, respectively. But assurance and advisory had a bad 2019, with revenue dropping by 5% and 3%, respectively.
And now the fallout to EY’s subpar advisory revenue has begun, according to the Financial Times:
EY has put about 100 jobs in its financial consulting unit at risk of redundancy after a decline in work and a drop-off in fees made from regulatory advice.
The Big Four accounting firm, which last week revealed revenues generated by its advisory business had shrunk 3 per cent in 2019, initially earmarked 350 roles that could be axed, according to one person close to the company.
The staff affected work at EY’s office in London’s Canary Wharf and the departures will include a small number of salaried partners, the person said.
While a source told FT that EY is in part blaming the job cuts behind the scenes on a lack of business from longtime advisory client Lloyds Banking Group, the firm of course won’t say that publicly, instead telling FT that “the proposed redundancies are not linked to any one client – it is in response to the change in the mix of our business.”
While EY isn’t in the midst of a massive cost-cutting extravaganza like KPMG is and hasn’t given its fat trimming a stupid codename like KPMG has, things seem to be a little unsettling in Uncle Ernie’s U.K. army right now.