Layoffs coming to the Big 4

A strange brew seems to be working some magic on the accounting industry right now. As companies get better at their Sarbanes-Oxley processes, and as the economy takes a hit, the big 4 are actually laying off accountants. Horrors! Compliance Week reports that Deloitte will dismiss about 800 professionals and staff throughout the country, primarily from its audit and risk consulting services. PricewaterhouseCoopers was rumored to also be planning some layoffs.  

This may be part of normal effort to get rid of the bottom performers, a ritual that was masked in recent years given the heavy hiring burden. The best course of personal action of course is to make sure you're not in the bottom 10 percent.  

The reality is that 800 jobs at Deloitte is barely a drop of water. The company has nearly 45,000 employees, meaning 800 people make up less than 2 percent. These could be the folks taking four-hour lunches and whatnot. Management has got to send a message every now and then.  

To some extent, this also reflects industry trends. You could point to the arrival of AS5 and the idea that more companies have their Sarbanes-Oxley acts together. There may be less need there. But there is surely heightened needs in other areas. IFRS stands as a terrific opportunity for audit firms, for example. Basel II strike me similarly. We may see additional opportunities arise from the fallout of the credit crunch. All in all, the industry is healthy. But the fact is that the recent boom was extraordinary. We may not see another like it for a long time. The Big 4 may feel some earnings pressure, but it could be worse. Just look at the banking industry. - Jim