Ernst & Young started the ball rolling last October when the firm announced that 200 jobs in the UK were to go, including some in the tax department. Next up it was KPMG, which declared in early February that at least 150 tax staff across the UK have to go. And finally on February 12 Pricewaterhouse-Coopers made the decision that 200 tax members of staff in the UK tax practice are to be made redundant.
So far it would appear that these cuts are restricted to the UK offices and more significantly to the tax practice. Both PricewaterhouseCoopers and KPMG have blamed the economic downturn for the job losses, saying that it has led to a fall in the amount of M&A work and associated tax work.
The planned redundancies account for around 6% of each firm's tax staff and will affect staff at all levels excluding partner. A spokesperson for PricewaterhousCoopers in the UK said that the decision to reduce the headcount followed a review of the tax practice's business model and was necessary to match the skills and staffing levels within the practice to client needs.
The spokesperson also explained that it was very much a last resource for the group, saying: "The redundancies are compulsory but this is after voluntary severance programmes, and more flexible working options such as allowing shorter working weeks and sabbaticals."
But despite the large cuts in the biggest of the big five firms, Deloitte & Touche, says that it is not making any redundancies in its UK tax practice. David Cruickshank, national head of tax at Deloitte & Touche in the UK says:
"Our tax practice continues to experience good growth in most advisory areas but clearly there has been a downturn in work in the transaction support and private areas as these markets are a bit sluggish at the moment."
Jerry Leamon, the global head of tax and legal at Deloitte & Touche thinks that it could be a difference in planning tactics that accounts for the fact that they have not made any UK redundancies.
"We're definitely seeing a slowing growth rate. Our growth rate globally this year is 9% and we hope to finish in double digits. The 9% compares to 18% this time last year. The combination of slowing growth rate and lower turnover are a challenge, but fortunately we created a flexible plan with lower growth rates and the ability to increase staffing if we have higher growth."
Andersen and Ernst & Young were unavailable for comment on how their UK tax practices have faired in the economic slowdown.
© 2021 Euromoney Institutional Investor PLC. For help please see our FAQ.