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EY, one of the Big Four accounting firms, has announced smaller pay increases and bonuses for its UK staff due to a slowdown in the market.
Financial Times reports that employees in EY’s tax advisory division, which consists of around 4,400 staff members, will receive a 2.2% increase in their base salaries. This is a decrease from the 6% raise given in 2023 and the 10% rise in 2022. Bonuses for this division are also expected to be lower for the year ending in June, and a few tax partners have been dismissed.
These reductions in compensation indicate how major professional services firms in the UK are tightening their year-end payouts following a difficult period for the industry. For instance, rival firm PwC recently provided most of its UK employees with a 3% pay increase, lower than in previous years. While EY has not disclosed pay rise figures for other divisions, its tax advisory business is generally more stable during economic downturns compared to other areas, such as Consulting.
Like other Big Four firms—Deloitte, KPMG, and PwC—EY has seen a decline in demand for its services amid a tougher economic climate. This led to a cost-cutting initiative last year, including job reductions in the UK, following the failed attempt to separate its audit and consulting divisions globally, known as Project Everest.
These adjustments in pay and bonuses will affect employees’ earnings. EY partners, who receive a share of the firm’s profits, had an average pay of £761,000 last year. In April, some partners were warned that their profits might decrease by up to 15% for the current financial year, highlighting the impact of the challenging economic environment. EY typically releases its full-year financial results in October.
Despite the reduced pay increases and bonuses, EY stated that its tax practice continues to grow. The firm emphasized that pay raises and bonuses vary based on individual performance and the performance of specific business units.
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