Accounting Firms

Grant Thornton cuts staff pay and hours to mitigate Covid-19 impact

Grant Thornton has cut the pay and hours of what is reported to be around 300 members of staff whose workload has declined, as it aims to mitigate the impact of Covid-19 on profits. 

According to the Financial Times, which  has reportedly seen a memo circulated to staff, the majority of the cuts have been issued to its transaction consulting team. However Grant Thornton has guaranteed to pay salaries of affected staff up to £3,125 a month – which is materially higher than the £2,500 guaranteed by the Governments furlough scheme. 

A spokesperson for Grant Thornton UK said that although it entered this “unprecedented period” in a “strong financial position” it expects the impact of Covid-19 to mean its profits may come in 20% below previous expectations.

They said: “Whilst many of our teams continue to operate at full capacity, we recognise that some limited areas of the firm are less busy, owing to current market demand for the services they specialise in. In order to preserve as many roles as possible without drawing on the support the government has made available through the furlough scheme, certain teams will now be working reduced hours in the short to medium term.  

“Although we entered this unprecedented period in an overall strong financial position our lead economic indicators now suggest that the firm’s profits for 2020 will be materially impacted.  Our analysis shows that, after the measures below, our profits may be 20% below our expectations.”

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They added: “The actions taken today mean the firm can continue supporting our people in a responsible way and their earnings will be guaranteed at a level that leaves no one worse off than had we used the furlough scheme. Moreover, should trading conditions improve beyond our revised projections by the end of the year, those impacted to an extent beyond their full salary entitlement will share in the increased profitability. 

“In making these decisions, we have considered a multitude of options, including use of the furlough scheme.  We have assessed our own business against the criteria for using the furlough scheme and we firmly believe the appropriate option for our firm is for the owners of our business, the partners, to invest in our people in this situation, despite the probable fall in partner earnings.” 

The spokesperson concluded by adding that the announcement, among previous measures, provides “greater flexibility”  in managing their employees personal circumstances during the period, redeploying some people to busier parts of the business.

Overall Grant Thornton said the decisions will “increase the resilience of our firm and provide further protection for our people, our clients and our business.” 

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