EY has reportedly cut bonuses and pay rises for thousands of its UK staff while also letting a number of partners go as the Big Four firm grapples with weaker demand for its services.
The firm told workers within its tax advisory business that they would be handed a 2.2 per cent base salary increase as part of its annual pay review, the Financial Times reported.
This figure is down from 6.6 per cent in 2023 and 10 per cent in 2022.
Staff are also said to have been told that bonuses in the 4,400-strong division would also be lower for the year to the end of June, while a small number of partners in tax advisory have been dismissed.
“Our UK tax practice continues to grow and we are investing across the business,” a spokesperson for EY told City A.M. “Pay rises and bonuses also vary based on individual and business unit performance.”
It is understood that EY’s pay review sees salary and bonus decisions vary across different parts of the business to reflect the performance of individual business lines and market conditions.
While tax advisory is considered a more resilient division during market turbulence than units like consulting and deals, the news underscores how the Big Four firms are dealing with reduced demand against a tougher economic backdrop.
Rival firm PwC reportedly handed most UK employees a three per cent pay rise in July, which was smaller than prior years.
Some of EY’s partners – who are paid out of the firm’s profits – were reportedly warned in April that profit per partner could drop as much as 15 per cent for its latest financial year. Average partner pay was £761,000 in 2023.
EY launched a cost-cutting drive last year after the collapse of a radical plan by its global bosses to split up its audit business and consulting arm, codenamed Project Everest. The firm also cut around 300 jobs in 2023.