EY UK to cut partner profit 20 per cent in coronavirus response
EY UK said today it will cut partner profit 20 per cent in response to the coronavirus pandemic.
The firm said in a statement that “its partners will do everything possible to navigate through the covid-19 situation with no redundancies amongst its 17,000 UK employees, no people furloughed and no reduction in employee salaries.”
The firm said it would reduce partner profit distributions in the UK by 20 per cent “in order to provide additional flexibility and financial resilience through the challenging economic environment posed by the covid-19 outbreak”.
EY said it would make a “number of critical internal promotions” to partner in July and continue its apprentice programmes for graduates and school leavers.
The firm said it expects to recruit around 1,000 graduates and apprentices this year and around 370 interns.
Steve Varley, EY’s UK chairman and UK and Ireland regional managing partner, said: “Covid-19 has inevitably impacted UK and global economies.
“Our business has remained resilient, but we have taken steps to look after our people and reduce and defer costs where possible.
“Reducing partner profit distributions is a further prudent move in a time of economic uncertainty and will provide additional flexibility and improve financial strength.”
Today, Deloitte confirmed it was cutting partner pay 20 per cent and freezing salaries and bonuses to help mitigate the coronavirus slowdown.
PwC has also said it will cut partner pay by 20 per cent, while KPMG told its partners that they could expect an average profit hit of 25 per cent.
Challenger accountancy firm Grant Thornton asked its staff to accept a 40 per cent pay cut to help avoid redundancies across the firm.
Law firms have also acted to conserve cash amid a recession that economists are predicting could be the deepest since the 1930s.
Magic Circle firms Freshfields Bruckhaus Deringer and Linklaters have both suspended payment of partner profit share, while Allen & Overy kicked off a partner cash call to boost its coffers, slowed profit distributions and frozen staff pay.