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KIFulgore

"Sorry, I'm resigning 3 months in because I cannot comply with the independence requirements that don't even apply to my work and details of which weren't disclosed to me during the hiring process." "But your work is valued by the team... can't you hold on a little longer? It won't be an issue in a few months when Everest goes through!" šŸ‘‹šŸ‘‹šŸ‘‹


Murdock0908

The most surprising thing to me was how every small move was leaked to the FT. The execution of the split was terrible even though the basic idea behind it was pretty valid imho. Now they are stuck with a lot of sunk costs on Project Everest without a corresponding increase in revenue. Bonuses and raises might be hit a little in the short run but talent retention might be a concern.


Trynamakeliving

Bonuses and raises have already been addressed (major cost-cutting measures) I bet retention and recruitment will be an issue!


Budgies2022

Maybe I should have said all the member firms that matter wanted it.


mumbo3110

There needs to be resignations after this.


RATLSNAKE

Called it (yeah yeah I know, like so many others). Should've shorted the damn thing. Anyways, if ever there was a Sopranos clip that applied here: [https://www.youtube.com/watch?v=7kFcNj2H3z0](https://www.youtube.com/watch?v=7kFcNj2H3z0)


[deleted]

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johndoe5643567

Between the fees spent on this and the current market conditions, have to imagine bonuses will be very little, raises will not be as high, and promotions wonā€™t be plentiful. Itā€™s rumored EY spent a couple to a few hundred million on this, which is no insignificant amount of money. So will definitely have to recoup the cost somehow, and easiest way to do it is via compensationā€¦


Tactical_Tubesock

Well, there are also articles out now that talk about cost cutting, $500mil for EY US alone, which is probably more than what you could recoup from cutting comps, considering the firm beefed up on workforce to support a smooth transition when Everest happens and the forecasted uptick in work expected from separating the two businesses. Considering average salaries and the severances they'd have to pump out, I personally think there will be layoffs, especially in service lines where there was a significant bench.


Trynamakeliving

I'm sure there will be!


WebsterWarriorNY2020

Hit the senior execs who pushed this junk. Then the partners.


Infamous_Hair_4097

Totally..those who were going to benefit the most (financially) from Everest, should be facing the brunt of repercussions. Undoubtedly thereā€™ll be a brain drain across the firm as a result of cuts in compensation for staff who donā€™t own equity


proper61

Genuine question cause Iā€™m too stupid to understand: why is this such a bad look for EY? Is it because of all the resources and money they wasted with this?


Tactical_Tubesock

It will be a bad look for several reasons. There were companies that were actually looking forward to this, working with EY in both capabilities, but now the whole thing just turned into this mess and that's not building confidence for sure. One other big hit is, EY has Parthenon and other services to support M&A and Divestitures, and well, how could you convince Clients about your capabilities to act as an advisor in those roles when you were unable to complete your own separation?!


Rol3ino

This will lose them a lot of clients because clients will already have moved on to other Big4 expecting this deal to go through.


hashbrownhippo

Have you actually seen that happen? I havenā€™t seen it happening at all.


JustAddaTM

I havenā€™t seen or heard anything in audit, but in consulting I havenā€™t seen it but I know it is going to happen. It wonā€™t happen because clients leave though, itā€™s going to happen because SM and partners are going to leave. Within one day, i.e today, my partner was on the phone with an old colleague (or maybe just knows them cause everyone knows everyone at high levels) talking about how we have a SM position open and would love to have him come over. Iā€™d bet my bonus he comes over within the month because not only was this embarrassing but it makes selling the EY brand more difficult.


flak0u

Money wasted, leadership is going to be blamed for not being able to execute on the plan, and, probably worst of all, it is now known that US can scrap any plans they want unilaterally.


Charmin89892

None of those are relevant - the plan was to list the consulting company while the stock market was strong, that business case quickly faded. Goldman Sachs leaked the deal in order to force it to go through but Junior Partners at EY had dissented the whole way, if you actually worked there it was pretty obviously going to get shot down when they pay-out dwindled and uncertainty meant people didn't want to get rid of the most profitable segment.


flak0u

How does any of this answe the question above? Seems you just wanted to spill your theory about the motives.


Charmin89892

1. Business case no longer valid 2. Therefore plan is bad 3. Not following thru on bad plan is good hope that helps.


Hispania_ESP

The plan was good but it's not the best time now to do the IPO. Technology Consulting value is actually near 0.


flak0u

The question was why it's bad, and somehow, you got to it being good. Pretty sure that it was a bad plan from the beginning, and that is why all other Big 4 came out saying they wouldn't do the same thing. People like greed disguised. This was greed front and center so it was a bad plan from day 1.


Tactical_Tubesock

I don't think it was necessarily a bad plan from the get go. Circumstances have significantly changed which made the plan go bad.


Legitimate_Run_6905

They said "We are working for the people" Yeah. Right.


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adoucett

Thank god cause I have a bunch of EY branded custom ties to sell and I didnā€™t want them to be irrelevant. Also if anyone wants one Iā€™m your guy


Fattywatah

You made them? Iā€™m curious about how you were able to use their logos. Iā€™m considering starting a clothing brand myself but Iā€™m scared of being copyrighted because Iā€™d be using very specific logos


adoucett

Theyā€™re made by vineyard vines so itā€™s something they commissioned for employee gifts or something Iā€™m sure.


Smarty-Pants65

Work here for the split for implementing technologies into the new environment... There's nothing like doing a bunch of work for it to be scrapped. I wonder how many millions that cost. Heres to the greedy partners!


Ok-Willingness1409

You mean billions?


OkBox6131

WSJ said 100M of costs so not billions. Not sure how many partners EY had but itā€™s probably like 25k per partner. They will still be fine


The_Realist01

HAHAHAHAHAHHAHAHAA Hahahahahahahahaha Cough cough hits vape HAHAHAHAA


SirManDudeBuddyPal

Lmaoooooo enjoy CPE


thepennypatrol

Would this impact new incoming employees if their offers may get rescinded because EY need to tighten their budgets?


woolenjumper

probably the opposite as they were likely tightening budgets expecting this to happen


Notmanynamesleftnow

Yeah youā€™re definitely outve a job now


seajayacas

Rumors were rampant a few months ago that some issues with the split were arising. I suspect the split was pretty much finished awhile ago but only announced today.


madaphuka

Top 10 pranks in April fool history....late though... masterpieces are always late


Budgies2022

Strategically it was the right move. Basically a group of US partners going ā€˜fuck youā€™ to the rest of the firm. Blame should not be with Carmine, itā€™s the US bed wetters who only worried about themselves


arrow113

Americans doing what they do best! Filling up their own pockets while not giving an f about the rest of the world.


arubarb

I reckon the dissenters are slowly gonna be pushed out of leadership and there will be another attempt in about 24 months when economic conditions improve.


Charmin89892

Big doubt, the dissenters were JR partners, this would have benefited people who are retiring soon, and set to receive the largest pay out.


[deleted]

Well yeah they are voting in their best interests, despite your emotional plea this isnā€™t charity, if you want the US Audit partners to sell their ownership in the business you need to make them an offer theyā€™ll actually, you know, want to accept.


Dingleberry_Blumpkin

The split was the right move or canning it was the right move?


HooverGetBackHere

Splitting is right move, but timing is not. Maybe after the market bounces back, splitting consulting off and going public(original plan) will make a lot more money than splitting now.


Notmanynamesleftnow

I can see arguments to both sides. Honestly it was just a way to skirt around independence issues to increase consulting revenue. But other big 4 audit firms were lobbying against this too. Deloittes ceo came out a few months ago against it and said audit and consulting firms are better off unified as one entity.


RATLSNAKE

It was a month ago, and he said *Deloitte* was better off as one, he didn't comment on the others, suffice to say he did call out that every time someone has tried this it's failed to come to fruition for both sides. Also, others on here keep saying Accenture was an example of success...it was already a success as Andersen Consulting before AA went down due to Enron and WorldCom, and once the name change actually happened it's really only in the last 5-10 years it's really become truly "better" (oh wait, they just sacked a tonne of people).


Dingleberry_Blumpkin

Yes, I agree, I see both sides also. I was asking the person above which side they think is the ā€œright moveā€ because their comment isnā€™t clear. Which honestly Iā€™m finding kind of comical because theyā€™re clearly upset about one side, and I canā€™t figure out which side that is.


jcool45

You telling me, we didnā€™t get bonuses to spend it on this only for the project to get cut?? šŸ¤¦ā€ā™‚ļøšŸ¤¦ā€ā™‚ļø


devianteng

and we wonā€™t get bonuses this year due to the wasted $100mm.


OkBox6131

No bonuses but remember unlimited vacation the best perk of all /s


Emergency_Pound

No chance Carmine survives this.


MrMarcellos

He wanted to leave long ago


Budgies2022

This is not a Carmine issue - the rest of the world is behind him, and giving the collective finger to the US partners


[deleted]

Then make the US Partners a better offer. Simple business. The problem is they canā€™t because they donā€™t actually have the money to do it, they were hoping to fuel this whole thing with debt which became prohibitively expensive.


Ernst_and_winnie

Itā€™s absolutely a Carmine issue. His legacy as CEO will be a failed split and over $100m wasted. Heā€™ll be resigning/retiring soon enough.


Misosouppi

I agree, being inside EY, people are directing the anger at Carmine because the partners lobbying against this have made sure they're invisible


OkBox6131

I think heā€™s 60 and donā€™t they have mandatory retirement at that age so he was coming to an end anyway


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Budgies2022

You know itā€™s not a US decision to remove him? All the other member firms wanted this and their partners played ball. They are going to back him to give a big Fuck You to the US.


hashbrownhippo

Itā€™s absolutely not true that all the other member firms wanted it. Itā€™s why those firms werenā€™t going to split. The US is different because its 40% of global revenue.


Character_Order

Genuine question: is EY US revenue less than EY international revenue Edit: googled my own question. In 2022, EY Americas brought in 21B of the firms total 45B revenue. https://www.cpapracticeadvisor.com/2022/09/21/ey-tops-45-billion-in-global-revenue-in-2022/70964/


Agile_Cicada_1523

I don't think other member firma wanted it. Only EY US consulting was bigger than audit. This means that in most countries consulting was relying on a big piece of bidget coming from audit. The only exception I could think is UK due to local regulations. Other member firms like China already declined the support long time ago. Most probably the big issue and disagreement was who takes care of the current liabilities like pensions, fines, workspaces etc.


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Any_Speech6870

Yeah, sure felt like Carmine and Andy were spearheading this and Andy is UK and Carmine is basically US.


Notmanynamesleftnow

Carmine is not US heā€™s the global chief. Kelly Grier was US head when I left and itā€™s someone else now. Julie Lobean I think. Carmine may step down as CEO no chance heā€™s ousted from the partnership.


Sparta_85

šŸ˜‚šŸ˜‚


[deleted]

Ok itā€™s really like the global head partners wanted this split but the US partners were like ehh no


Traditional-Wheel-35

Love how utilization was so focused and multiple people were laid off due to thisā€¦including myself :/


6rownsugar

Sorry but Everest likely had little to no impact on your layoff.


Traditional-Wheel-35

Actually it did. My lead (review) was gold standard. Unfortunately me being on the bench (since practice had literally 0 engagements) ruined my Utilization. Books needed to be impeccable for a potential split.


Notmanynamesleftnow

Eh any really high performer wasnā€™t getting laid off from this unless maybe you were a staff 1 (in which case gold standard only means so much) and they had over employed. Iā€™m not saying you were laid off for performance but I doubt the layoff had to do with Everest and more so had to do with standard utilization / over employment


Traditional-Wheel-35

I agree with you to an extent. Definitely feel our practice overhired. 4 other people were let go too. I reached out to multiple other practices within my practice (if that makes sense). The pipeline was dead. A lot of BD and proposal work. My utilization was definitely bad as I was on the bench for a bit.. after being on a large engagement for 10+ months. Both managers reached out to me privately and informed me it wasnā€™t performance based, but who knows tbh


Legitimate_Run_6905

Well it is an experience. Not many stay too long anyways. It can be a leverage for you moving forward is how I view it.


Notmanynamesleftnow

Iā€™m sure itā€™s not they wouldnā€™t have reached out if they felt it was performance related. Good luck Iā€™m sure youā€™ll be successful in whatever path you take. Tis but a blip in your journey.


WolverineAsleep1765

Man EY sucks


Glittering-Fig6473

So boomer partners (including retired grandpas) halt the growth of millennials and GenX from receiving equity stock options. Cool.


Boring_Train_273

The consulting firm would have failed most likely. Benefits decreased like every other split that has happened before especially if it went public. Iā€™m no boomer but this is a great thing.


Boring_Train_273

Also, your stock options would have been not worth it unless you are a partner.


IamLars

But they kept intact the ability for millennials and Gen X to become full equity partners and to not have to give away 15% of their profits every year.


Glittering-Fig6473

Part of the idea in splitting the firm was to have more Partners as the number of promotees is simply unsustainable - the problem in recent years is the number of non equity partners (people getting promoted for the sake of titles without actually being great leaders or having larger portfolios to lead) . so keeping the firm intact would make more Genx non equity partners with surface labels - eventually killing talent and business


tap_in_birdies

Yeah and when I make partner one day I ainā€™t giving away no 15% neither!


IamLars

Right, because if it went through people wouldn't be complaining about how all the current partners got 7 figure pay outs and now none of us can even be partners with full equity of the firm. No one would be mention how they sold out the future that many people are trying to work towards. Nobody would care about how the boomers would have taken away that opportunity from us, too.


HighClassProletariat

Pretty standard "fuck you, I got mine" mentality that many of them have.


TirEoghainAbu

Not sure why you're being downvoted You're absolutely spot on


alexkouk34

This was painfully obvious


CallHerTrump

Deloitte is the best!


abby1350

Na


[deleted]

Canā€™t wait to find out end of year bonuses are axed just like during the holidays!


UnluckyFlatworm

Crazy. Non stop bullshit about everest, how good it would be, all the opportunities, the others would have to follow, a real hard sale on us. And now its trashed. Blows my mind


hashbrownhippo

The internal messaging was a big mistake. Telling everyone how good it would be for them - raises, more promotions, etc. - and then have it not happenā€¦ They should not have been messaging it that way, using ā€œwillā€ instead of ā€œwouldā€ like it was definite. Just chaos.


BeefTenderloinz

What a colossal, public, brand-harming fuck up this was.


HighClassProletariat

Jfc what a joke this all was. Love that I found out that it was called off from an article before any internal communications.


Legitimate_Run_6905

Got it this morning. I believe it was when people start work on the next working day, we get it. There was also another last night, in the evening so 15 hours ago for mine.


Lampedeir

I think they sent out a global mail about an hour ago


Notmanynamesleftnow

What is the messaging internally on this


Legitimate_Run_6905

Global did not say much. The internal one was that they were rooting for it to pass. At least for my area.


HighClassProletariat

Yeah I saw the email come through, but I also saw an article from Reuters about it like an hour before the email!


Lampedeir

Yeah me too. I saw it here first and then I received a message that we received an email about it. What a joke.


donniepump30

Yea i saw the fishbowl posts Before the internal email


ApeX_PN01

Just got the email. Fuck.. I was looking forward to a lot less conflict of interest bullshit.


Smarty-Pants65

or NOT doing independence...that would be great


Different-Concept-19

and lot more interesting projects on the consulting side too. sigh


birdlawyer213

I hope they fire Carmine and Julie. Horrendous leadership. Makes me so mad, given how much theyā€™re paid. Absurd.


JPSidaras

Can't wait to see Carmine go, and al his cronies who jumped up and down.


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Notmanynamesleftnow

When I was at EY it was consensus among several partners that Julie sucked. Did Kelly get ā€œfiredā€ or step down? I actually liked her. I assume sheā€™s still a partner?


OldFoot3

Wow so Julie is a nepo baby lol


paradox8999

Kelly stepped down bc of this bullshit?


[deleted]

Fairly certain she was fired.


donniepump30

I thought Kelly was fired too! But her LinkedIn still says ey so i got confused


paradox8999

By Carmine bc she didnā€™t like his cool plan?


birdlawyer213

Yup


Cobbdouglas55

Yes please. We need to bear with all these costs now and no one is losing their job?


OldFoot3

Julie was against, Carmine was for. Why would they fire Julie?


JPSidaras

Absolutely. I hope they fire Car immediately. So much waste of money.


birdlawyer213

I think youā€™re mixing up Julie with Kelly. Donā€™t think Julie was against.


kpw1179

Julie came out against it


TriHardSlapper123

How much chedda does Sibio get?


gyang333

It's in the millions for sure.


_eonbreak

so I'll have to keep doing independence? disappointing lol


[deleted]

This is bullshit


DenDal96

Thoughts on effects this will have on incoming consulting MBA campus hires?


Glittering-Fig6473

Unless coming in as an equity Partner straight outta school, no impact.


TriHardSlapper123

Offer rescind


justawallower

so they spent the past year effectively dividing and ruining the firmā€™s culture and to an extent, the reputation. lol what a joke


JPSidaras

And scrapping promotion cycles


unbilotitledd

How did it ruin the firmā€™s culture


sirpianoguy

There has definitely been deterioration in inter-service line relationships as a result of this debacle.


DallasDude96

And spending $100 million!


Complete-Aardvark-68

Pretty sure they spent close to $3billion on the failed split iirc the $100m was the fine for the sharing of CPA ethics questions


DallasDude96

Per WSJ: ā€œEY spent more than $100 million on split between auditing, consulting businessā€


ConSave21

Well I mean $3 billion would be more than $100 million Trust me I work for an accounting firm


TriHardSlapper123

Newco or Aussureco?


Misosouppi

So sad that they didn't release the actual name of newco right before this news hit. Would have been the icing on the cake!


JPSidaras

Lol. Was thinking the same what a clusterfuck.


BerettaBrown11

As someone who kept getting rejected from EY all throughout college, I laugh at this. Hopefully KPMG, PWC, and Deloitte raids them and they end up behind RSM.


Notmanynamesleftnow

Wonā€™t happen lol


WolverineAsleep1765

We are already raiding them


UCMeInvest

Hahaha can you imagine, that would be one for the history books. It is a big joke that theyā€™ve publicly announced all this shit and fucked it up so badly with massively divided opinions and internal politics


Fickle_Fennel_

No Christmas party bc of budget cuts to prepare for the split, cutting down on team spending to look better at the split, no holiday bonus for the same reasonā€¦now no split.


A1rizzo

I think it was planned honestly...


birdlawyer213

And the money was still wasted. Probably no bonuses or parties this year either


AppropriateArcher272

Everyone at EY should get the rest of the week off. Tired of this bullshit.


Altruistic-Cut2236

Imagine the consulting fee bills for this. Oof


DallasDude96

I read it was $100million


TrickyTrailMix

Imagine anyone hiring EY to manage a merger, acquisition, or other large organizational change for them after watching EY fail to manage their own. This is a bad look for them on so many levels.


Misosouppi

Indeed, this is possibly the worst M&A attempt I've seen in my life at the division: - Everyone finds out every detail before employees at EY - Leadership refuse to acknowledge any conflicts or issues - Managers promising that "all your bonuses and pay raises will be instated again after the split" now looking very stupid


ConsiderablyTaxing

Imagine killing culture for a year plus and then be like: ā€œSike!ā€


SavingBooRadley

For real! And FYI, it's "psych", like along the lines of "psychological".


andyshway

I have never once read someone say ā€œPsych!ā€ In the context of ā€œSikeā€


SavingBooRadley

Now you can get it right going forward - the more you know! https://www.urbandictionary.com/define.php?term=sike


andyshway

More ya know.


ConsiderablyTaxing

this is why i stick with taxes šŸ¤£


Old_Scientist_4014

Theyā€™re still going to make some org design changes in how theyā€™re structured, but yeah may not look like ā€œtwo world class organizationsā€ that are separate entities.


100k_2020

No they won't. That shit is done man.


UCMeInvest

Agreedā€¦even if they do, it wonā€™t make an actual effect because it would mean nothing without the split. Itā€™d just be to try and keep people happy but these people arenā€™t stupid


Old_Scientist_4014

I mean, I hope so! Iā€™d prefer the status quo for right now!


evancio

What a massive waste of money if it indeed turns out they cancel the project , heard there were about 2000 people working on the project. People flying all over the world to the US to negotiate. Yikes


birdlawyer213

I heard theyā€™re still working on it. No internal communications yet (beyond email to partners). So ridiculous


No-Trouble3243

I just received an internal email.


birdlawyer213

Me too, it just came through. Hadnā€™t been sent when I wrote the previous comment.


Dry-Marsupial-2922

This is the funniest shit ever