Big Four make financial adjustments in light of Covid-19

Big Four accounting and advisory firms are embarking on cost-cutting measures while trying to minimalise job cuts, according to new reports from Livemint. Some of the new policies include postponement of employee appraisals, pay cuts for partners and a freeze on hiring.

Deloitte, EY and PwC have all announced that they will postpone their employee appraisals, which translates into a postponement of promotions and bonus payments. KPMG is yet announce any definitive measures, although the firm has confirmed that it is contemplating on plans.

The new plan comes in light of the significant economic disruption being caused by the global Covid-19 crisis. The consulting sector is among many that have seen their revenues affected by the crisis, as clients across India and the world either put projects on hold or cancel them altogether.

The sector is being forced to cut costs, and the new measures are aimed at ensuring that these do not translate into job cuts. Livemint spoke to executives at all the Big Four firms, who indicated the individual measures that their organisation is taking to ensure minimal damage in these trying times.

At Deloitte, officials report that senior leadership is striving for transparency in its handling of the crisis, through clear lines of communication to its staff. Partners are forfeiting their withdrawals from the Partner pool, according to a partner, while recruitment at the firm has also been frozen.

“No new recruitments will be considered unless absolutely necessary. Individuals who have already been given offers to join will be honoured, but the date of joining will be pushed,” said the partner to Livemint. EY, meanwhile, has not been explicit about its policies, but made the decision to put performance-based bonus payments on hold.

At PwC, partners have agreed to take a 25% pay cut. PwC’s policy declarations were more public, through a LinkedIn post by Chairman Shyamal Mukherjee, who assured employees that their welfare was the priority.

“We at PwC India have initiated proactive measures that will help navigate the uncertainties, keep all employees safe and make our organization more sustainable. We have worked out some interim measures, which include deferment of promotions, increments and bonus till a point in time one gets certainty around business,” wrote Mukherjee.

The statement was partly in response to employee concerns about salaries. KPMG’s plan for the upcoming months is expected to be clearer in the coming week.

The World Health Organisation reports that more than 30,000 people have now lost their lives to the Covid-19 crisis, with 203 countries or territories affected. The situation has had an unprecedented impact on life and economy, with many sectors struggling to stay afloat in these times, while others are forced to be creative in their approach to operating under an environment of lockdown and recession.