BDO furloughs 700 employees, firms cut pay
Mid-tier firm furloughs staff two weeks after attending a virtual meeting with several competitors on government assistance
BDO has furloughed 470 first-year trainees and 230 support staff in a bid to mitigate the financial impact of coronavirus.
The firm’s partners will also have quarterly dividend payments frozen until January 2021, alongside a monthly pay cut up to 25 percent.
“There is general consensus that we are either in, or about to enter, a severe global recession,” a BDO spokesperson said via email. “Governments around the world are introducing economic policies and support packages to help businesses protect job.
“BDO is not unaffected by the situation and we have had to take clear – but temporary – measures to ensure we can weather the current storm and protect jobs.”
Alongside this decision, the firm has also frozen all pay raises, promotions and new recruitment for its 5,500 UK staff, although offers already made to 400 trainees to join at the end of the year remain valid.
These developments come two weeks after the Big Four, BDO and Grant Thornton met virtually to discuss the reputational risks associated with accepting government assistance, including the furlough scheme.
One Big Four firm confirmed to Accountancy Age that it does not intend to utilise the UK’s current furlough scheme.
Each of the Big Four have also reduced monthly partner profits by 20-25 percent, with Deloitte UK’s CEO Richard Houston writing on LinkedIn that any actions taken by the company “must ensure that the highest earners bear most of the financial burden.”
Mid-tier firm Mazars, who has furloughed 200 employees, has taken similar measures as its competitors, reduced partner earnings to the tune of 25 percent.
The UK Government’s Coronavirus Job Retention Scheme (CJRS) eligibility was recently expanded to include those who were both employed and on PAYE payroll, on or before March 19.