Synopsis
Following the development, which caught even its senior-most partners by surprise, a few global leaders assured staff that their interests and well-being would be taken care of if indeed the firm went ahead with the separation plan. They said the split move was still in the early stages of deliberation.
EY's India employees were seeking greater clarity and attempting to assess the personal and business implications after reports emerged last week that the Big Four accounting firm was thinking of splitting its audit and advisory businesses, amid rising regulatory concerns over conflict of interest following a string of incidents involving auditors globally as well as in India.
Following the development, which caught even its senior-most partners by surprise, a few global leaders assured staff that their interests and well-being would be taken care of if indeed the firm went ahead with the separation plan. They said the split move was still in the early stages of deliberation.
EY global chief executive Carmine Di Sibio on Friday communicated to employees that "with the changing competitive, regulatory and market landscape, work is ongoing to evaluate strategic alternatives." Officially, EY said in a statement: "We are in the early stages of this evaluation, and no decisions have been made."
ET spoke to staff members of EY in India at various levels to understand the move's potential impact on people and business in the country. The questions on the minds of senior partners were about their work positions in the new hierarchy, managing clients during a transition, and about the hefty sum they would get if the advisory businesses opted for an initial public offering (IPO).
Mid-level partners were more concerned about their possibilities for advancement under the new structure, any changes in remuneration that may result from the shift, and the potential makeup of the new management teams.
The anxiety at lower levels of the workforce were mostly regarding changes in their work environments. Responding to a questionnaire by ET on the likely split and its India impact, EY said: "We routinely evaluate strategic options that may further strengthen EY businesses over the long-term. Any significant changes would only happen in consultation .with regulators and after votes by EY partners."
The organisation added that it regularly conducts "scenario planning and review of EY businesses on a global basis to determine that we have the optimal strategy, structure and footprint to focus on delivering high-quality audits and exceptional service to all clients across EY service lines."
EY India under chairman Rajiv Memani has jumped to the top of Big Four leaderboard by investing ahead of time in new service lines,
EY India under chairman Rajiv Memani has jumped to the top of Big Four leaderboard by investing ahead of time in new service lines, employing an aggressive market-focused strategy, and focusing on fast-growing customers rather than just conventional large industrial organisations. As a result, the firm is now the dominant Big Four in India despite being No. 3 globally in terms of top line and people.
The company employs about 80,000 people in India, including 33,000 workers - more than 550 partners - in the India servicing business.
"The firm was well on its way to becoming the first ₹10,000 crore professional services business in India in the next year or so in a short time frame. We just had our best year ever and now suddenly there is uncertainty," an EY partner who has worked with the firm for 30 years told ET.
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