Wow. What a crazy market it's been the last couple weeks. Among the casualties..Lehman, Merrill and AIG. The Fed decides to bail out AIG, but not the stock holders. They then decide to ban short selling on financials. Now there are rumors that they're trying to help take distressed assets of company books. Unbelievable. Potentially a $1 trillion plan. Investing currently is not for the faint of heart. For those who haven't really been following what's going on, please do so. This is stuff for the ages.
Anyway, enough rambling. So how is this affecting the big 4? I had a conversation with some partners concerning this issue, and they believe that the big 4 are "recession-tolerant", not "recession-proof". Yes, clients are fighting back on the fees this year more than ever before. Yes, some clients are being swallowed up by the market and thus no longer exist. Yes, they're using this "crisis" as an excuse to offer lower raises than in years past. Yes, there have been layoffs in some of the big 4, most notably Deloitte. So how is it "recession-tolerant"?
Companies may be reeling, but they still need their financials to be audited. Heck, banks will probably want more conservative financials in order to provide financing to companies. According to one partner, VCs are sitting on lots of cash, or "dry powder", and thus start-ups shouldn't have much trouble finding financing. I'm not sure about that, but he probably knows more about me. Hiring might be lower than previous years, but hey, they're still hiring. All in all, it's a little rocky right now, but nothing compared to the financials sector. I'd still agree with the fact that a majority of us have pretty good job security.
Anyway, enough rambling. So how is this affecting the big 4? I had a conversation with some partners concerning this issue, and they believe that the big 4 are "recession-tolerant", not "recession-proof". Yes, clients are fighting back on the fees this year more than ever before. Yes, some clients are being swallowed up by the market and thus no longer exist. Yes, they're using this "crisis" as an excuse to offer lower raises than in years past. Yes, there have been layoffs in some of the big 4, most notably Deloitte. So how is it "recession-tolerant"?
Companies may be reeling, but they still need their financials to be audited. Heck, banks will probably want more conservative financials in order to provide financing to companies. According to one partner, VCs are sitting on lots of cash, or "dry powder", and thus start-ups shouldn't have much trouble finding financing. I'm not sure about that, but he probably knows more about me. Hiring might be lower than previous years, but hey, they're still hiring. All in all, it's a little rocky right now, but nothing compared to the financials sector. I'd still agree with the fact that a majority of us have pretty good job security.
Comments
Those other services will be effected. Combine this with the dramatic drop in demand for Sox services and it can be nervous time for folks outside of assurance or tax.
Thanks