As I mentioned in my Twitters on Thursday, I had the opportunity to speak with Deloitte’s National Director of Public Relations, Deborah Harrington, on the phone earlier.
Deborah, who mentioned she had been responsible for public relations for FASB before coming to Deloitte, has communicated with me via email
about the blog before. She represents the only one of the Big 4 who has acknowledged this blog and the fact that some folks are reading it. Her willingness to talk on the phone today is a sign of transparency and willingness to engage that is good to see and is also demonstrated by Deloitte’s efforts to engage in Social Media.
At least they’re trying.
Ms. Harrington responded to my email asking about the authenticity of the story below that appeared on the Dow Jones Factiva site. She asked me to call and we spent about twenty minutes on the phone. She thought that the reporter had asked her for a statement because of my blog post on Monday.
She sent me a more succinct statement that she said was more accurate than the story below. In particular, we talked about the fact that the reporter wanted to compare these staff reductions to prior years. But the problem is that this kind of openness and transparency is new. There are no publicly available prior year numbers to compare this to.
As I have said before, in particular with regard to the layoffs at PwC in February
that have continued since, the Big 4 do not like to talk about cuts. They have a habit of reducing staff surgically, in a thousand little cuts
, across practices, geographies, offices, so that each person thinks they are unique. Those cut are often made to feel inferior and a failure, as most often the cuts are characterized as performance related and a result of forced ranking
techniques. I also see the survivor rationalization too – when survivors dis’
those cut by saying they just “couldn’t make it in the Big 4″ or they were “dead wood.” Helps cut down on ongoing morale problems when the remaining staff feel more secure, safe, because they think they are superior.
Ms. Harrington made it clear on the phone, and in her statement, that the vast majority of cuts were based on the negative economic reality the firm is facing. What’s frustrating to professionals, both those cut and those left behind, is why the firms are not better at planning and forecasting.
Ms. Harrington’s official statement is as follows:
In a move to align its workforce to better reflect business and client needs, Deloitte LLP is taking a number of steps to reduce costs, including adjustments to its workforce levels in the United States. The cost-containment program is taking place across all support functions and client service units.
Part of the plan is to align our headcount according to current and projected revenues. Like our competitors, we are affected by a number of economic events, including the overall slowdown in the U.S. and global economies.
It’s refreshing when one of the Big 4 admits that they are as vulnerable as their clients to both an economic downturn and other forces outside their control. It may not make those who have been let go feel better right now (and they are commenting), but it should help them when looking for a new job. What is disappointing is when the firms don’t manage what is within their control – recruiting, commitments to new hires, commitments to H1B visa holders,and commitments to tenured employees and those whose performance has been rewarded in the past but are now in the wrong place at the wrong time.
Ms. Harrington said that some employees were offered other positions, including opportunities to relocate. She also said that Deloitte has not rescinded any offers
to students and has no plans to do so. They are still recruiting. She also listened to my comments about the difficulties that H1B visa holders
have when they are suddenly let go and said she would make management aware of my concerns. I get a lot of mail about Big 4 firms cutting H1Bs first and most severely. They have a legal responsibility to these employees that goes beyond what they do for others. Are they upholding their obligations and making employees aware of their rights?
By all reports, Deloitte has severance programs in place and is doing the best they can for employees under the circumstances. But it’s the circumstances, and why they could not be better anticipated and managed, that we have an issue with, Ms. Harrington.
Please let your firm know they are expected to be smarter than that.
This news story is currently only available via Factiva, the Dow Jones news service for corporate subscribers. It is not showing up on WSJ or anywhere else that I can find.
27 August 2008
8:27 PM GMT
Dow Jones News Service
(c) 2008 Dow Jones & Company, Inc.
(Updates spokesperson’s comments in fourth paragraph and adds comments from recruiter starting in the sixth paragraph.)
DOW JONES NEWSWIRES
Global accounting firm Deloitte & Touche LLP this week began layoffs that will reduce the 45,000-strong U.S. staff by “slightly less than 2%,” a company spokesperson said Wednesday. Layoffs will occur across all departments and offices of the firm.
“Part of the plan is to rightsize our headcount according to current and projected revenues,” spokesperson Deborah Harrington said in an e-mailed statement. “Like our competitors, we are affected by a number of economic events, including the overall slowdown in the U.S. and global economies.”
Harrington said Deloitte, like many other financial services firms, reduces its workforce annually to “meet the needs of our clients,” but did not say how this year’s cut compares to typical downsizings. While some of the reductions are based on performance reviews, Harrington said much of it is part of a cost-cutting measure.
Harrington said the firm is hiring in other departments and said the U.S. staff at the company has increased by “several thousand” over the last few years.
“Its hard to draw any broad conclusions from what Deloitte is saying, as it relates to the rest of the industry,” said Jon Zion, president of eastern US operations for financial-services recruiter Robert Half International.
With unemployment in accounting services around 2% – compared with the 5% national unemployment figure – the broader economic slowdown has not weighed as heavily on accounting industry jobs as it has elsewhere, Zion said.
“Up until this point, we are not seeing any pattern of workforce reductions” across the industry, either in the private and public sectors, Zion said.
-By Kejal Vyas, Dow Jones Newswires; 201-938-5460, firstname.lastname@example.org [ 08-27-08 1627ET ]