EY to cut costs in UK after US · Accounting VanMorgan

EY to cut costs in UK after US · Accounting VanMorgan

EY has warned its UK staff that a new austerity measure is coming and there will be a large number of redundancies. This is the result of a failure between consultancy and accountancy.

EY’s UK directors say they are unsettled by the collapse of plans to separate the consulting and accountancy businesses. That happened this week after the US partners disagreed on the financial compensation and resources needed to work on the rest of the audit process.

Clean ship

Now that the split has been put on hold for so long, EY UK is picking up the pace to clean up its own company. Costs must be reduced and can not be done without painful measures. Managing partner Anna Anthony says the business needs to address inefficiencies. He did not comment on the actions EY is considering.

Travel expenses

A source close to the company leaked to the media that those inefficiencies were identified as a result of preparatory work for the breakup. It is about duplication in processes and technology. The austerity measures come in earlier cost-cutting. For example, EY in the UK has already made significant savings on travel costs for internal events and training costs.

Employees leave

Anthony said he felt “disappointed and embarrassed” that the deal fell through. This was reported by the Financial Times. Hywel Ball, chief executive of EY in the UK, said this week that the firm could see some staff leaving. According to him, these were employees who wanted to leave anyway, but wanted to wait for EY’s split.

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Strong growth

Paul warned partners of “difficult times” ahead. He said the UK accounting watchdog expressed disappointment and “understands” the news that the split is not going to take place for the time being. Despite all that, Paul expects the UK business to show ‘strong double-digit growth’ for the third consecutive year.

Earlier this week, EY’s US partners were told the firm would have to cut $500 million in costs after the deal fell through.

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