To my teammates,
As the COVID-19 global pandemic continues to grow, we are continuing our work to balance our three Purple Chips:
To take care of our people
To be there for our clients and
To keep our business strong
As you’ve heard me say before, all three of these priorities are interconnected. We can’t focus on just one priority at any given time – we have to always keep them in balance, even when it seems as though they are in conflict with one another. This is how we must proceed in the work we are doing together to continue to serve our clients with quality and excellence and become the most admired firm in our profession.
A key part of keeping our business strong is continuing to monitor impacts of the pandemic and resulting economic recession on our business – impacts we can see today, and that we can see taking shape for the fiscal year to come.
The overall picture is filled with uncertainty, but some trends are clear. Revenues have declined in a few business units in Advisory due to contracting demand in the market. Billing and collections have slowed across the firm as clients’ businesses are impacted by the slowing economy. Voluntary attrition is down dramatically as the job market contracts, creating unsustainable overcapacity in several areas of the firm. Finally, as we move intentionally to achieve a more competitive cost to deliver, we expected changes in our business would result.
In light of these trends and actions we’ve been taking to become more competitive, we are making small adjustments to our staffing levels in a few specific areas of the firm:
We are reducing the size of some teams across Advisory Services, including putting some of our recent new hires on furlough, where market demand has fallen off significantly;
We are eliminating a small number of ICS roles where organizational changes will enable us to better align to our business priorities; and
We are downsizing our Workplace Solutions team, including some executive assistants, as the scope of the business need for these roles has changed.
Consistent with our culture of caring, we are providing these teammates a package of severance pay and benefits to help ease the transition to their next professional opportunity.
When the COVID-19 crisis first hit, we took a number of steps to balance the needs of our people, our clients and our business. In April, we reduced partner/principal draw payments, asked the owners of the business to contribute to a capital call to strengthen our balance sheet and asked managing directors on the leadership team to take a temporary pay cut. In May, we decided to eliminate merit salary increases and annual bonuses for all employees as a way to maintain financial strength while keeping job reductions to a minimum.
This week’s decisions are difficult, but represent changes that will help keep our firm strong in FY21 so we can continue to balance all our goals for our people, clients and business going forward. We’ve scheduled a short firmwide all hands call this coming Monday, where I’ll discuss these decisions a bit more, and everyone in the firm will have an opportunity to ask questions. I’ll hope you’ll make time to join.
For my video this week, I spoke with Sam Shaw, our chief financial officer, about some of the trends we’re seeing in the market and our business results that led to these decisions. I hope you’ll take a moment to watch.
Thanks again for all you continue to do for our firm. Have a safe and restful weekend.
Brad Preber
CEO