Big 4 firms don't hold the same pull they used to and the public accounting profession has become more commoditized. Increased regulations have forced firms to be more conservative to avoid lawsuits.
Competition has become more fierce with "Tier 1" firms receiving Private Equity investments and other management consulting shops are adding/offering service lines that the Big 4 offers while paying their employees more due to having less overhead.
Our team has also had conversations with Big 4 Partners saying staff/seniors aren't learning at the same clips prior to COVID due to lack of onsite collaboration and working from home. That is why KPMG delayed promotions to make senior at 3 years instead of 2.
Firms are needing to get creative and it'll be interesting to see what the public accounting profession will look like in the next decade!
Keep in mind my perspective. I make a living working with candidates who have this foundation. Companies pay people like me 10’s of thousands of dollars to hire candidates who have a specialized skill set and the Big 4, as they are set up today, provide invaluable experience to accounting and finance professionals.
No doubt candidates coming out of Big 4 shops have more options than those who don’t, but as other firms continue to gain public clients and provide their people with similar experience to the bigger firms that gap will shorten.
Again, it’ll be interesting to see what unfolds in the next decade!
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😱 PwC Laying Off 1,800 Employees in First Formal Cuts Since 2009 😱
The cuts will affect 2.5% of the workforce at the Big Four accounting firm’s U.S. unit
PricewaterhouseCoopers’s U.S. unit is laying off about 1,800 workers, its first formal layoffs since 2009, and restructuring its technology group as the firm faces slowing demand for some of its advisory business
The cuts, about half of which are offshore, span employees ranging from associates to managing directors and include business services, audit and tax
PwC plans to restructure its products and technology teams to further embed them in individual business lines and streamline processes in business services
The market is getting quite rough globally now...
https://lnkd.in/gvACWZnh
Firing partners in the Big Four audit firms is a complex and costly process.
Partners are part-owners of the firm, making them integral to the business. Removing a partner can disrupt operations and client relationships.
Firing a partner typically requires a thorough investigation and review process to ensure fairness and compliance with legal and ethical standards.
Terminating a partner can harm the firm's reputation and client trust, which is crucial in the audit industry, similar to terminating a CFO in a public company. The stock can take a sizable hit.
Partners bring in significant business and revenue. Losing a partner can have a direct financial impact on the firm, as these roles are rainmaker roles to a large extent.
There also may be legal and contractual obligations that need to be addressed, which can be time-consuming and expensive.
Consequently the Big Four (Management Consulting firms) often opt for other measures like performance improvement plans or reassignments rather than termination when it comes to their partners.
Several weeks ago KPMG ordered all its US employees back to the office at least 3 days a week or they would be fired, soon it will be 5 days and employees can work at home on the weekends. This week KPMG said it’s firing 4% of the audit staff, managers and associates but no partners will be axed. The problem is the Big 4 over hired in 2022 & 2023 and now must cut back; at least in the US but not overseas: i.e., PWC also laid off 1800 workers in audit; again, no partners were let go. About the layoffs: KPMG released this BS: “these actions reflect our ongoing focus to align the size shape and skill of our workforce to the market.” Really this is an oxymoron as KPMG didn’t reconcile the firings with the fact that audit revenues rose 6%. Albeit partner compensation rose too. In other words, no steps have been taken to cut hours and raise pay for associates; although KPMG said it supported cutting the 150 hrs requirement. My advice to accounting majors is to go into tax at a small firm or else go into industry. There is a shortage of accountants in the US but not at the big 4. They’re “big” outsourcers; & the troubling thing to me is that the universities are funneling innocent students into a shrinking market segment. The small firms never have a chance to tell their story in the classroom because they aren’t invited
Some highlights from this recent WSJ article which is worth reading:
"PwC plans to notify those affected, roughly 2.5% of the workforce at the U.S. unit, in October, the people said... PwC on Wednesday announced its plans for layoffs and the restructuring in a memo to U.S. staff obtained by The Wall Street Journal."
It’s apparent that this was an internal communication that was leaked, not a "public announcement" as some are claiming. Still, the fact that PwC chose to communicate this to employees is significant. Professional services firms like the Big Four are not public companies and have essentially no obligation to announce decisions like these.
"The firm has said that it has been an outlier among the Big Four over the past two years by not laying off anyone in the U.S. and having no plans to do so. EY, KPMG and Deloitte collectively laid off thousands of U.S. workers in that period."
This has indeed been an industry-wide trend. Pandemic over-staffing was a contributing factor, similar to the situation in tech. The article notes that "Many professional-services firms have experienced weaker demand in certain areas due to higher interest rates and weaker economic conditions."
In my own search for new opportunities since being laid off from Deloitte, I've encountered a wide range of situations in this unusual market. What has surprised me is the frequent lack of awareness among potential employers about how commonplace these layoffs are.
With over 1.5 million employees globally, including 350,000 in the U.S., the Big Four represent a vast pool of talented professionals. Recruiters and hiring managers: familiarizing yourselves with these industry trends could unlock valuable talent for your teams.
#BigFour#WorkforceTrends#Layoffs#JobSearch#ProfessionalServices
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This is surprising and sad to read. PwC is a company who focuses on their people and their culture. For them to publicly announce a lay-off is out of the ordinary.
Wall Street Journal is reporting upcoming PwC lay-offs.
Yesterday, there were articles about tracking and monitoring PwC employees in the UK.
Several weeks ago KPMG ordered all its US employees back to the office at least 3 days a week or they would be fired, soon it will be 5 days and employees can work at home on the weekends. This week KPMG said it’s firing 4% of the audit staff, managers and associates but no partners will be axed. The problem is the Big 4 over hired in 2022 & 2023 and now must cut back; at least in the US but not overseas: i.e., PWC also laid off 1800 workers in audit; again, no partners were let go. About the layoffs: KPMG released this BS: “these actions reflect our ongoing focus to align the size shape and skill of our workforce to the market.” Really this is an oxymoron as KPMG didn’t reconcile the firings with the fact that audit revenues rose 6%. Albeit partner compensation rose too. In other words, no steps have been taken to cut hours and raise pay for associates; although KPMG said it supported cutting the 150 hrs requirement. My advice to accounting majors is to go into tax at a small firm or else go into industry. There is a shortage of accountants in the US but not at the big 4. They’re “big” outsourcers; & the troubling thing to me is that the universities are funneling innocent students into a shrinking market segment. The small firms never have a chance to tell their story in the classroom because they aren’t invited
This situation highlights why choosing a medium-sized firm is often the better path. The accounting landscape is evolving, and it’s time to look beyond the Big 4. Smaller and mid-sized firms not only provide a balance that the Big 4 often overlook, but they also offer valuable growth and stability for those pursuing a rewarding career in accounting. To students: explore your options—medium-sized firms have a lot to offer, even if they don’t get the same spotlight in classrooms.
Several weeks ago KPMG ordered all its US employees back to the office at least 3 days a week or they would be fired, soon it will be 5 days and employees can work at home on the weekends. This week KPMG said it’s firing 4% of the audit staff, managers and associates but no partners will be axed. The problem is the Big 4 over hired in 2022 & 2023 and now must cut back; at least in the US but not overseas: i.e., PWC also laid off 1800 workers in audit; again, no partners were let go. About the layoffs: KPMG released this BS: “these actions reflect our ongoing focus to align the size shape and skill of our workforce to the market.” Really this is an oxymoron as KPMG didn’t reconcile the firings with the fact that audit revenues rose 6%. Albeit partner compensation rose too. In other words, no steps have been taken to cut hours and raise pay for associates; although KPMG said it supported cutting the 150 hrs requirement. My advice to accounting majors is to go into tax at a small firm or else go into industry. There is a shortage of accountants in the US but not at the big 4. They’re “big” outsourcers; & the troubling thing to me is that the universities are funneling innocent students into a shrinking market segment. The small firms never have a chance to tell their story in the classroom because they aren’t invited
Insightful post highlighting the importance of small to mid sized firms & considering them when you're looking to start your career post grad or make a shift mid career!
Several weeks ago KPMG ordered all its US employees back to the office at least 3 days a week or they would be fired, soon it will be 5 days and employees can work at home on the weekends. This week KPMG said it’s firing 4% of the audit staff, managers and associates but no partners will be axed. The problem is the Big 4 over hired in 2022 & 2023 and now must cut back; at least in the US but not overseas: i.e., PWC also laid off 1800 workers in audit; again, no partners were let go. About the layoffs: KPMG released this BS: “these actions reflect our ongoing focus to align the size shape and skill of our workforce to the market.” Really this is an oxymoron as KPMG didn’t reconcile the firings with the fact that audit revenues rose 6%. Albeit partner compensation rose too. In other words, no steps have been taken to cut hours and raise pay for associates; although KPMG said it supported cutting the 150 hrs requirement. My advice to accounting majors is to go into tax at a small firm or else go into industry. There is a shortage of accountants in the US but not at the big 4. They’re “big” outsourcers; & the troubling thing to me is that the universities are funneling innocent students into a shrinking market segment. The small firms never have a chance to tell their story in the classroom because they aren’t invited
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AI can automate these accounting and auditing jobs soon. More serious times for memory-based work like accounting/auditing is coming? Are we prepared for the period of joblessness?
Several weeks ago KPMG ordered all its US employees back to the office at least 3 days a week or they would be fired, soon it will be 5 days and employees can work at home on the weekends. This week KPMG said it’s firing 4% of the audit staff, managers and associates but no partners will be axed. The problem is the Big 4 over hired in 2022 & 2023 and now must cut back; at least in the US but not overseas: i.e., PWC also laid off 1800 workers in audit; again, no partners were let go. About the layoffs: KPMG released this BS: “these actions reflect our ongoing focus to align the size shape and skill of our workforce to the market.” Really this is an oxymoron as KPMG didn’t reconcile the firings with the fact that audit revenues rose 6%. Albeit partner compensation rose too. In other words, no steps have been taken to cut hours and raise pay for associates; although KPMG said it supported cutting the 150 hrs requirement. My advice to accounting majors is to go into tax at a small firm or else go into industry. There is a shortage of accountants in the US but not at the big 4. They’re “big” outsourcers; & the troubling thing to me is that the universities are funneling innocent students into a shrinking market segment. The small firms never have a chance to tell their story in the classroom because they aren’t invited
Several weeks ago KPMG ordered all its US employees back to the office at least 3 days a week or they would be fired, soon it will be 5 days and employees can work at home on the weekends. This week KPMG said it’s firing 4% of the audit staff, managers and associates but no partners will be axed. The problem is the Big 4 over hired in 2022 & 2023 and now must cut back; at least in the US but not overseas: i.e., PWC also laid off 1800 workers in audit; again, no partners were let go. About the layoffs: KPMG released this BS: “these actions reflect our ongoing focus to align the size shape and skill of our workforce to the market.” Really this is an oxymoron as KPMG didn’t reconcile the firings with the fact that audit revenues rose 6%. Albeit partner compensation rose too. In other words, no steps have been taken to cut hours and raise pay for associates; although KPMG said it supported cutting the 150 hrs requirement. My advice to accounting majors is to go into tax at a small firm or else go into industry. There is a shortage of accountants in the US but not at the big 4. They’re “big” outsourcers; & the troubling thing to me is that the universities are funneling innocent students into a shrinking market segment. The small firms never have a chance to tell their story in the classroom because they aren’t invited
"My advice to accounting majors is to go into tax at a small firm or else go into industry." Solid advice from Alan! At Maven Oak CPAs in Lafayette, CA, we’re always on the lookout for talented professionals who want to grow with us. We believe that people and culture matter, which is why our roles are fully in-person—building a strong team and client relationships happens best face-to-face. #AccountingCareers#TaxCPA#InPersonCulture#MavenOakCPAs"
Several weeks ago KPMG ordered all its US employees back to the office at least 3 days a week or they would be fired, soon it will be 5 days and employees can work at home on the weekends. This week KPMG said it’s firing 4% of the audit staff, managers and associates but no partners will be axed. The problem is the Big 4 over hired in 2022 & 2023 and now must cut back; at least in the US but not overseas: i.e., PWC also laid off 1800 workers in audit; again, no partners were let go. About the layoffs: KPMG released this BS: “these actions reflect our ongoing focus to align the size shape and skill of our workforce to the market.” Really this is an oxymoron as KPMG didn’t reconcile the firings with the fact that audit revenues rose 6%. Albeit partner compensation rose too. In other words, no steps have been taken to cut hours and raise pay for associates; although KPMG said it supported cutting the 150 hrs requirement. My advice to accounting majors is to go into tax at a small firm or else go into industry. There is a shortage of accountants in the US but not at the big 4. They’re “big” outsourcers; & the troubling thing to me is that the universities are funneling innocent students into a shrinking market segment. The small firms never have a chance to tell their story in the classroom because they aren’t invited
Several weeks ago KPMG ordered all its US employees back to the office at least 3 days a week or they would be fired, soon it will be 5 days and employees can work at home on the weekends. This week KPMG said it’s firing 4% of the audit staff, managers and associates but no partners will be axed. The problem is the Big 4 over hired in 2022 & 2023 and now must cut back; at least in the US but not overseas: i.e., PWC also laid off 1800 workers in audit; again, no partners were let go. About the layoffs: KPMG released this BS: “these actions reflect our ongoing focus to align the size shape and skill of our workforce to the market.” Really this is an oxymoron as KPMG didn’t reconcile the firings with the fact that audit revenues rose 6%. Albeit partner compensation rose too. In other words, no steps have been taken to cut hours and raise pay for associates; although KPMG said it supported cutting the 150 hrs requirement. My advice to accounting majors is to go into tax at a small firm or else go into industry. There is a shortage of accountants in the US but not at the big 4. They’re “big” outsourcers; & the troubling thing to me is that the universities are funneling innocent students into a shrinking market segment. The small firms never have a chance to tell their story in the classroom because they aren’t invited
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3moKeep in mind my perspective. I make a living working with candidates who have this foundation. Companies pay people like me 10’s of thousands of dollars to hire candidates who have a specialized skill set and the Big 4, as they are set up today, provide invaluable experience to accounting and finance professionals. No doubt candidates coming out of Big 4 shops have more options than those who don’t, but as other firms continue to gain public clients and provide their people with similar experience to the bigger firms that gap will shorten. Again, it’ll be interesting to see what unfolds in the next decade!