First Jefferies…then Berenberg…then Morgan Stanley…and now Ernst & Young.
Pay cuts, layoffs and bonus cuts are now officially the norm on Wall Street after the sector had one of its most prosperous years in 2021.
As we have noted numerous times, dealmaking slowed in 2022 with the rise in interest rates and now Wall Street firms are looking to make cuts after overzealous hiring sprees and ambitious expansion plans that now seem untenable.
While names like Jefferies and MS slashed bonuses, Ernst and Young has done away with them completely…telling staff they would simply not be getting holiday bonuses this year, FT reported.
The company held an “all hands” meeting on Friday of last week where it delivered the news to its employees. The company is in the midst of splitting its audit business from a tax and advisory business heading into 2023.
FT noted that over the last 2 years, “EY US has paid merit bonuses to top performers around this time, on top of the main bonuses awarded at the end of its fiscal year in June”. There are no funds available for such bonuses this year, however.
The firm told FT: “While EY continues to experience strong revenue growth, we have elected at this time not to fund our additional, discretionary mid-year program given the changing economic environment.”
“We remain steadfast in our commitment to being a leader in recognition and rewards. This includes our intention for planned annual performance-based bonuses and ongoing recognition awards,” it added.