Accounting giant EY has postponed the start dates for around 200 graduate hires as it grapples with a slowdown in business activity.
New recruits set to begin their roles at the company’s strategy arm, EY-Parthenon, in the US next month or in January will now not be needed until mid-2024.
To support affected recruits, EY will provide stipends ranging from $12,000 to $35,000.
The firm has also reportedly reduced the number of internship slots for next summer to recalibrate a hiring imbalance.
During a recent call with staff, leaders at EY-Parthenon said a disappointing market for mergers and acquisitions and private equity activity is to blame for sluggish advisory revenue growth since the start of the firm’s fiscal year in July, according to the Financial Times.
It marks the second consecutive year that EY has delayed start dates for new hires. The firm previously pushed back start dates for its 2023 recruits.
In a statement, EY said the decision was made “after careful consideration of the current M&A environment and our business needs”. It said it aims to ensure new joiners receive high-quality assignments that “ensure a successful start and a strong professional trajectory.”
It comes as a number of US firms have struggled to forecast demand for consulting services, which soared during the Covid-19 pandemic but has since sharply dropped off.
Adding to the pressure, a recent report from the Institute for Government (IFG) recommended that the UK government cut its dependence on management consultants. Some £5.4bn worth of consultancy contracts are set to expire over this Parliament, according to procurement specialist Tussell.
Chancellor Rachel Reeves is seeking to halve government spending on external contractors, following criticism that Whitehall has become overly reliant on expensive advisors, including the Big Four firms, EY, KPMG, PwC, and Deloitte.
It also comes as competition is intensifying as non-Big Four firms report an increase in audit work across FTSE 250 companies and other market segments.