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Big four firm EY will now cut back on the work hours and pay of teams experiencing a reduction in demand as it battles against making redundancies amid the COVID-19 downturn.
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EY moves on pay cuts amid COVID-19 downturn
15 April 2020
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EY chief executive and Oceania managing partner Tony Johnson has now announced that the firm will now be “providing options” for its partners and staff to scale back hours and a corresponding reduction in pay from 1 May to 30 June 2020.
The firm will allow staff to use their leave entitlements to maintain their pay levels and has also requested those who are not engaged on chargeable work to take leave around the Easter break.
Mr Johnson, however, would not specify the extent of the reduction in hours and pay for his staff and partners.
EY’s move comes after fellow big four PwC mandated a reduction in pay and working hours across its 8,000-strong workforce, and KPMG effected a pay cut and 200 redundancies across the firm.
“From the outset of the pandemic, we have communicated that any measures will be applied across the business, at all levels, based on demand, and as such, they will impact different areas of the business to varying degrees and at different times,” Mr Johnson said.
“We will continue to monitor the situation and flex according to demand. Where demand for our services in specific parts of our business becomes more certain and stabilises, our people will return to their usual working hours.”
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EY will also reduce partner draws, cut down on discretionary spend and put a halt on recruitment.
Mr Johnson said that while he was committed to holding off on redundancies, he could not guarantee that such moves would be off the table in the near future.
“All of these measures are designed to avoid arriving at a place where we need to effect redundancies,” Mr Johnson said.
“No decisions have been made to make any redundancies at this point in time; however, as we have consistently and transparently communicated to our people, where there is significant and prolonged downturn in demand, and re-deployment is not possible, redundancy will be reluctantly applied as a last resort.
“We are well aware of how anxious our people are feeling amid this disruption and uncertainty, and we continue to communicate frequently to provide as much reassurance and clarity as possible while also emphasising the available resources to help with managing the situation, including our people’s mental health.”
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