Grant Thornton is cutting the pay and working hours for 300 UK employees that have roles in departments that are less busy as a result of the Covid-19 downturn.
The move from the sixth largest accounting firm, to cushion its balance sheets from an expected 20% dip in profits, is set to affect staff in the firm’s transaction consulting team, marketing and administration departments.
In an internal memo, the accounting firm told its 4500 employees on Monday that its transaction consulting team would be hit by the majority of the cuts, given the recent decline in mergers and acquisitions work, the Financial Times reported. A proportion of the group’s administrative staff and marketing staff will also see similar reduction in hours and pay.
Around 150 Grant Thornton staff have already agreed to take a 40% cut in pay and reduced hours.
The spokesman said the firm considered a multitude of options, including use of the furlough scheme. But after assessing the government scheme the group had decided it would not be appropriate.
In the memo, chief executive David Dunckley promised employees that the pay reduction would not leave them worse off than if they had opted to furlough staff. Grant Thornton will pay up to £3,125 a month, compared with the government’s offer to pay 80% of a furloughed employee wages, up to the monthly cap of £2,500 a month.
Other mid-tier firms have decided to take up on the government’s scheme. At the beginning of the week BDO furloughed 700 of its 5,500 employees, while Mazars said it plans to furlough around 200 of its 2,350 employees.
The Big Four have not announced any decisions to furlough staff and instead have taken alternative routes to reduce costs. EY and Deloitte both slashed partner pay by 20%. KPMG partners have been told they could face a 25% reduction in pay and PwC UK pushed back its annual promotions and bonus rounds for staff and informed partners they will take the brunt of the financial burden.
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