In response to challenging economic conditions, EY is implementing substantial layoffs among its partners in the United States. The Big Four accounting firm's intensified partner reductions are a result of diminished demand and cost-saving initiatives following the collapse of a firm breakup plan.

According to Wall Street report, the impact of these layoffs, particularly affecting the advisory sector, with over 10% of consulting partners and about 4% in strategy and transactions being affected. This translates to more than 100 partners in consulting and over 30 in strategy and transactions, encompassing both junior and senior roles.

EY has initiated the process of notifying impacted partners, commencing last week and continuing through this week. These cuts surpass the usual annual reductions for underperforming partners. Earlier this year, in April, EY downsized its US workforce by 3,000 employees, constituting less than 5% of its total U.S. staff.

The accounting and consulting industry, facing a slowdown in revenue growth, is undergoing workforce restructuring. While these firms substantially expanded their teams during the pandemic due to increased demand for consulting services, the anticipated post-pandemic attrition failed to materialise as expected.

The fluctuations in demand for consulting services are more susceptible to economic shifts compared to the relatively stable nature of the audit business line. This disparity significantly influences industry trends, creating a more cyclical pattern within the professional-services sector.

This restructuring trend is not unique to EY; major firms like KPMG, Deloitte, and McKinsey have also implemented workforce reductions in various segments throughout the year, adapting to the evolving economic landscape.