August 14, 2020

Severance

What Can Big 4 Accountants Expect Come Compensation/Firings Time?

Now that we’ve covered the natural and expected attrition of the Big 4 firms this time of year, let’s talk about what to expect if and when the post-busy season ax falls again. Per a reader’s request:

“Something similar to the salaries thread, except let the people tell us what $ package they were offered upon being “laid – off”, and how that was calculated (i.e. 1 weeks pay for every year of service? PTO paid out? 1 month severance pay?). I think this would be of interest to many folk out there who are about to be let go, as they can get a rough idea of what to expect and plan accordingly.”


I don’t expect the firings to be very widespread, but rather focused on small, top-heavy sectors (random, baseless examples – state and local tax in St. Louis, followed by IT advisory services in Atlanta). The reason for this is because the firms should be accounting for many to jump ship between April and Labor Day. Those up for promotion (“It’s coming this year, we promise!”) will bail in July/August once promo’s are announced.

For those of you only sticking it out to earn the manager title this summer before you leave, my advice is to start looking now. Inform your recruiters that the title is a mere formality and they will tailor their job hunts accordingly.

So. Let’s kick the weekend off with some wild speculation:

Potential Cuts:

• Federal tax groups
• Small offices and practices that have recently lost several small clients or one large client (e.g. PwC Orlando tax)
• Further cuts “when deemed necessary” before new hires begin in the fall

Safe zones:

• Hedge fund audits
• M&A advisory (based on KPMG whispers)
• IT advisory

Were you let go in the past two years? Share your severance packages in the comments so everyone can better gauge what to expect.

Layoff Watch ’10: More Details on Ernst & Young

Thumbnail image for ey8ball.jpgWe have some additional details to share with you to supplement last Friday’s post on E&Y’s New Year layoffs.
While we were surprised at the timing, a source has indicated to us that IT Risk and Assurance layoffs have occurred at the firm each January since 2008. This is due to a serious drop off in utilization in the new year after high utilization in the fall months with the exception of especially in the audit heavy ITRA practices.
In regards to the audit practice, we spoke to another source over the weekend that told us that layoffs would not occur until after busy season but assured us that they are being planned.
Finally, in response to one comment asking about severance details, we were informed that the severance for those let go is a week’s pay for each year of service with a minimum of 4 weeks pay. This seems to be fairly standard (with a few variations) amongst the Big 4.
We’ve received word on some positions cut but we’re still awaiting further details so if you have any information or can provide more insight discuss below or get in touch and we’ll update them here.
UPDATE: A source has indicated that three IT Advisory managers in FSO in New York were included in the cuts.

Ernst & Young Severance Negotiable?

Everything is negotiable, amiright? We heard that staff in one North Central office were given one month of severance but at least one person made a big enough stink that they ended up with three months. Personally, we thought the Big 4 was pretty inflexible on this point but hey, if it’s true, nice work.
Jump over to the main thread to check the latest discussion and if there are still details to be reported, get in touch.