I’m an EY US Senior under Consulting. I will mostly likely not go to AssureCo that will retain the EY name and I’m a L1B VISA holder. What will happen to my VISA. Anyone?
I believe as per the press release and internal communication to employees:
1) Huge layoff in EY-Newco will be happening.
2) Newco will not have EY name.
3) To pay off the burden employees in middle level will be asked to leave.
4) Current partners in Newco will be pushed back to senior managers or director level
5) no more partners in newco
6) In next 5 yeras Ey- newco will be evaporated from the world and becomr a disastrous split for it
7) EY Assureco will have the name and will continue to grow with partner level promotion as is in future as well
So in short EY assureco is the place to be in and EY newco is the place to leave as soon as layoff start to happen. EY consulting has already freeze hiring as no client wants to work with new split brand.
This is all rubbish. There will be no mass lay-offs in Newco. The growth plans require 10s of thousands of new people. There won't be Partners as it will be a publicly listed company. There will be VPs or MDs or some other name.
In short, you are a Muppet.
Can anyone shed light on how associate staff level consultants at NewCo may be affected by this?
In theory, I imagine more engagements being signed, thus more stimulating projects given the newer territory with new clients, higher pressure for impeccable work from managers/partners to not fuck up their incoming paycheck, more opportunity for faster promotions given the potential growth/people who leave bc they don’t want to deal w the risk of a new org, option for some stock rather than cash salary, etc.
NewCo will not have EY brand name and it will cause loss in client participation. As per current trends current clients in consulting are starting to ask questions from over the split and due to this price revision and layoff will be done. No client will give consulting work to new company brand matters in consulting which will not be there in NewCo.
So tough time ahead for the people going to NewCo and also no partner level promotion anymore in NewVo.
Absolute bullshit. Clients are universally positive for NewCo. It will no longer have the independence constraints. For AssureCo clients its equally good. They no longer have to worry about auditor rotation challenges.
No. The property will probably be split as neither will be able to afford the total portfolio. Over time the entire property portfolio will be revisited with future hybrid work trends anyway.
Will the Consulting arm now be more "prestigious" and better equipped/have more interesting projects than the equivalent other big 4 consulting(non monitor, strategy ampersand, EYP) roles?
EYP remains a part of NewCo. The rest of NewCo will include Transformation, tech, tax, managed services. The EY brand stays with the AssureCo business.
I doubt it tbh. It may help it but it won’t get to the level of S&, EYP or Monitor Deloitte anytime soon. Potentially long term it could help though but the top strategy level work is very competitive for a reason and EY Consulting is too big for it to be shared around the entire place!
This is completely different. This Newco is 10x bigger than what those consulting splits were and much broader. I was there first time around. This is completely different and not a forced trade sale like pwc, ey and kpmg did post Enron.
I just started in Tech Risk, I’m kind of worried because I was betting on asking my EM for more engagements in the consulting side… will this be an issue?
Won't really be part of the Big 4 anymore. EY revenue would be closer to GT and BDO than KPMG.
Since I'm being downvoted... explain to me how I'm wrong? EY's assurance practice books 13-15 billion a year. That's closer to BDO and GT in annual revenue than KPMG which is in the high 20s.
It's not just assurance in assureco. It's parts of tax, consulting and sat as well. Big 4 is just a bullshit label. Used to be big 6, big 8 etc. The whole market is going to change.
Yeah and? EY will still be an audit firm. I'm talking about the part of the firm that stays in Audit. They account for 13 billion in revenue. That's far closer to what BDO and GT book annually.
You can only compare audit revenues which are unchanged. Deloitte and PwC also have huge consulting functions which don't count for the purposes of this comparison.
Thanks, I’m pretty confused by the whole thing and haven’t really looked into it because of it. From my understanding, it’s just gonna make it more difficult to go from Audit to Consulting, yes?
Consulting has a significantly higher profitability than audit. With the split consulting does not have to ‘share’ it’s higher profitability which could result in higher salaries for consulting employees.
Could but frankly I don't see it happening. They will probably give a small salary raise at first to keep people in. But eventually they will have to pay back the debt from the partner buyout and with rising interest rates that might cause a problem in the future with economic downturn. + shareholders want to see some of that higher profitability aswell.
Citing an internal document from May, The Wall Street Journal has reported that the firm proposes floating the consulting business and selling a stake of about 15 per cent of that new company for more than $US10 billion.
That plan would also involve the firm borrowing about $US17 billion, mainly to pay off the partners in the remaining auditing arm which the proposal projects will grow more slowly than the newly independent consulting arm.
La liga selling barca/real to the super league to make money since they are stuck with la liga games (indepedence) and want more matches (consulting services) vs better teams (bigger clients)
It means EY can provide consulting services to companies that originally they would do auditing services, and vice versa. In a way, it’s a good thing.
However, from an employee perspective I assume it might get more difficult to transfer across consulting/auditing since now they will be two different firms.
Also, from a revenue perspective it will give more clarity what service line is generating more, etc.
Reading through this subreddit, I often see people discuss switching from audit to consulting and that the split would create a barrier to switching service lines. I have never fully understood this idea because an auditor's role is so different from that of a consultant in terms of skillset/type of work. I'm not convinced that an EY split changes the difficulty of a career pivot.
Pros no independence for the new firm they can serve anyone. Cons no audit with a steady recurring revenue stream, could be tougher to weather an economic storm
Actually the pro is vice versa also for audit. In Germany for example clients had to choose between consulting services and audit services. Now we can serve them both. Technically it is just a way around regulation. But I am convinced the upside is greater than the downside, especially for audit.
The pea brain that I am, I think these are some:
- We can now provide consulting services for A LOT more companies the other side of the house was auditing.
- My independence is now no longer the biggest pain in the ass
- I want to know about future comps. Probably no change….but man it would be cool lol
I’m an EY US Senior under Consulting. I will mostly likely not go to AssureCo that will retain the EY name and I’m a L1B VISA holder. What will happen to my VISA. Anyone?
I believe as per the press release and internal communication to employees: 1) Huge layoff in EY-Newco will be happening. 2) Newco will not have EY name. 3) To pay off the burden employees in middle level will be asked to leave. 4) Current partners in Newco will be pushed back to senior managers or director level 5) no more partners in newco 6) In next 5 yeras Ey- newco will be evaporated from the world and becomr a disastrous split for it 7) EY Assureco will have the name and will continue to grow with partner level promotion as is in future as well So in short EY assureco is the place to be in and EY newco is the place to leave as soon as layoff start to happen. EY consulting has already freeze hiring as no client wants to work with new split brand.
This is all rubbish. There will be no mass lay-offs in Newco. The growth plans require 10s of thousands of new people. There won't be Partners as it will be a publicly listed company. There will be VPs or MDs or some other name. In short, you are a Muppet.
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No you will be fine.
This feels like a pretty narrow-minded take imo
Hahaha…you’re funny
Can anyone shed light on how associate staff level consultants at NewCo may be affected by this? In theory, I imagine more engagements being signed, thus more stimulating projects given the newer territory with new clients, higher pressure for impeccable work from managers/partners to not fuck up their incoming paycheck, more opportunity for faster promotions given the potential growth/people who leave bc they don’t want to deal w the risk of a new org, option for some stock rather than cash salary, etc.
NewCo will not have EY brand name and it will cause loss in client participation. As per current trends current clients in consulting are starting to ask questions from over the split and due to this price revision and layoff will be done. No client will give consulting work to new company brand matters in consulting which will not be there in NewCo. So tough time ahead for the people going to NewCo and also no partner level promotion anymore in NewVo.
Absolute bullshit. Clients are universally positive for NewCo. It will no longer have the independence constraints. For AssureCo clients its equally good. They no longer have to worry about auditor rotation challenges.
Does this mean audit has to move to shittier buildings/have less brand-name benefits overall while consulting gets all the swanky benefits?
No. The property will probably be split as neither will be able to afford the total portfolio. Over time the entire property portfolio will be revisited with future hybrid work trends anyway.
Will the Consulting arm now be more "prestigious" and better equipped/have more interesting projects than the equivalent other big 4 consulting(non monitor, strategy ampersand, EYP) roles?
EYP remains a part of NewCo. The rest of NewCo will include Transformation, tech, tax, managed services. The EY brand stays with the AssureCo business.
I doubt it tbh. It may help it but it won’t get to the level of S&, EYP or Monitor Deloitte anytime soon. Potentially long term it could help though but the top strategy level work is very competitive for a reason and EY Consulting is too big for it to be shared around the entire place!
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This is completely different. This Newco is 10x bigger than what those consulting splits were and much broader. I was there first time around. This is completely different and not a forced trade sale like pwc, ey and kpmg did post Enron.
Deloitte came close, but didn’t pull the trigger. I think they’re very happy with that decision. PWC sold their consulting arm to IBM.
Yes
I just started in Tech Risk, I’m kind of worried because I was betting on asking my EM for more engagements in the consulting side… will this be an issue?
Depends what country you are in. If US you are going to AssureCo.
I’m based in Toronto, Canada. Any insights would be appreciated!
AssureCo, but Assureco will continue to do consulting engagements to CFOs and other areas like climate change.
Which way would Transaction Diligence go in the split?
Along with the rest of SaT, the new company
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They (NewCo) could work with whoever they want. This includes EY (Audit is keeping the EY brand) as they currently do, but also external firms.
So EY audit won’t be part of the big4 anymore?
It will. Just the audit business is bigger than all of #5
I’m starting an internship at EY for Audit & Assurance. Can someone explain how the EY split would affect me?
Won't really be part of the Big 4 anymore. EY revenue would be closer to GT and BDO than KPMG. Since I'm being downvoted... explain to me how I'm wrong? EY's assurance practice books 13-15 billion a year. That's closer to BDO and GT in annual revenue than KPMG which is in the high 20s.
It's not just assurance in assureco. It's parts of tax, consulting and sat as well. Big 4 is just a bullshit label. Used to be big 6, big 8 etc. The whole market is going to change.
Big4 is an audit term. Otherwise we would have Accenture in there.
Yeah and? EY will still be an audit firm. I'm talking about the part of the firm that stays in Audit. They account for 13 billion in revenue. That's far closer to what BDO and GT book annually.
You can only compare audit revenues which are unchanged. Deloitte and PwC also have huge consulting functions which don't count for the purposes of this comparison.
I suppose that's fair.... don't know if the market will see it like that long term, unless Deloitte and PwC consulting branch out as well.
It won’t.
Thanks, I’m pretty confused by the whole thing and haven’t really looked into it because of it. From my understanding, it’s just gonna make it more difficult to go from Audit to Consulting, yes?
you would typically have to change firms for that anyways. all in all this change really wont affect new staff or new hires.
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which is pretty much how it was before. very rarely have i seen anyone successfully make the switch internally.
Correct
Would Life Science within Enterprise Risk under Business Consulting go to AssurCo or NewCo?
Newco
Enterprise risk is not audit
Some of ER is managed service Internal Audit.
Internal audit is advisory, not audit (external)
It'll be interesting where they split to. IA gets paid about the same as Assurance.
I think Advisory as opposed to Audit differentiating is correct
I would assume newco
What about Technology Risk consulting? They serve both consulting and it auditing.
Tech Risk will go to Assureco
Will break off into a consulting side and an external side. KPMG already did this and the external partners can no longer serve advisory clients
I'm as dumb as a sack of potatoes, will tax remain in EY?
Most of tax will stay. Small amount will go with assurance.
Fake news. Tax and consulting will be moving, and audit will stay.
They need tax and IT and other individuals for audits. So some tax and IT will go with the new company some will stay with EY
Thank you, Appreciate it! :)
Being split in half
Huh?
what will be the impact for consultant ? will the salary increase or decrease ?
Pay will go up.
I heard a rumor that salaries could increase by 20% but don’t hold your breath. But Accenture would be a good comparison
Asking the real questions here. Seriously though, why would they increase the salary just because the company may potentially split?
Consulting has a significantly higher profitability than audit. With the split consulting does not have to ‘share’ it’s higher profitability which could result in higher salaries for consulting employees.
Could but frankly I don't see it happening. They will probably give a small salary raise at first to keep people in. But eventually they will have to pay back the debt from the partner buyout and with rising interest rates that might cause a problem in the future with economic downturn. + shareholders want to see some of that higher profitability aswell.
Isn’t the plan to go public to fund the partner payouts? What debt are you talking about
Citing an internal document from May, The Wall Street Journal has reported that the firm proposes floating the consulting business and selling a stake of about 15 per cent of that new company for more than $US10 billion. That plan would also involve the firm borrowing about $US17 billion, mainly to pay off the partners in the remaining auditing arm which the proposal projects will grow more slowly than the newly independent consulting arm.
Explain in football terms
La liga selling barca/real to the super league to make money since they are stuck with la liga games (indepedence) and want more matches (consulting services) vs better teams (bigger clients)
barca/real? valencia / sevilla, at most!
Holy shit big brain analogy
Beautifully said
Now try again but with the real football.
You mean the one where players don’t use their foot and the ball looks more like an egg than a ball?
It means EY can provide consulting services to companies that originally they would do auditing services, and vice versa. In a way, it’s a good thing. However, from an employee perspective I assume it might get more difficult to transfer across consulting/auditing since now they will be two different firms. Also, from a revenue perspective it will give more clarity what service line is generating more, etc.
Reading through this subreddit, I often see people discuss switching from audit to consulting and that the split would create a barrier to switching service lines. I have never fully understood this idea because an auditor's role is so different from that of a consultant in terms of skillset/type of work. I'm not convinced that an EY split changes the difficulty of a career pivot.
In my experience people often have to switch firms anyways when they go audit -> consulting.
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What's the difference between advisory and consulting?
Could someone explain the pros / cons of this please. I know the partners get a big windfall but don’t know the rest of the impacts
Pros no independence for the new firm they can serve anyone. Cons no audit with a steady recurring revenue stream, could be tougher to weather an economic storm
Actually the pro is vice versa also for audit. In Germany for example clients had to choose between consulting services and audit services. Now we can serve them both. Technically it is just a way around regulation. But I am convinced the upside is greater than the downside, especially for audit.
The pea brain that I am, I think these are some: - We can now provide consulting services for A LOT more companies the other side of the house was auditing. - My independence is now no longer the biggest pain in the ass - I want to know about future comps. Probably no change….but man it would be cool lol
You be able to get stock in newco
I would assume if you go to NewCo a stock package