Warning: Lay Offs

[UFEwriter2009]

Due to recent "economic conditions" and firms' decreasing ability to recover fees, some accounting firms have engaged in laying off their UFE writers.

My recent experience with CB was just that - two of us wrote the UFE on Thursday and returned on Monday to find our jobs gone. This post is to serve as a warning to others; before you accept employment at a firm, try to find out as much as possible about their hiring/termination practices so that this doesn't happen to you!

I've been very successful in writing my exams - from 1st decile on CKE, to 4th decile on SOA and then making it to UFE (in one shot in 2009), thereby thinking that I was on a road to a nice raise, and hopefully a promotion. However, upon my return to work this past Monday, within half an hour I was called into the partners' office and was informed that I was being laid off due to "economic conditions." The partners stated that this was a very tough choice, but they had decided to lay me off. Soon after, I also found out that the only other person in the office that had written the UFE was also laid off.

This struck me as a bit odd...considering that at the beginning of the year there were 6 potential employees that could have made it to the UFE. Of these 6, one failed the CKE twice, one was laid off before SOA (he had failed CKE twice and finally passed on his third try - being laid off the day after he was finally successful), one had failed SOA in 2008, and one had failed module 6 of the CASB program a few weeks before the UFE. There are also 2 more students who are beginning their studies for the CKE and another who will be starting employment with the firm in October.

There was a meeting held after we left the firm - each one of these people were informed that their jobs were not in danger and that they had no need to worry for their employment security. I question why the only two people laid off were the UFE writers.

As the firm has come up with a calculation of hours that I "owe," I am also not going to receive any termination benefits, something which is imperative upon terminating an employee without notice, putting me in a pretty tough spot, especially after writing the UFE.

I am not writing about this to bad-mouth the firm, I am solely writing to let everyone know that anything can happen. If you have any questions, please feel free to write me.

[myCAsite]

Thanks for sharing your story. Hopefully someone visiting the site might be able to help you. Good luck!

[taxman]

There was a meeting held after we left the firm - each one of these people were informed that their jobs were not in danger and that they had no need to worry for their employment security. I question why the only two people laid off were the UFE writers.

My first though is that you and the other UFE writer were more senior than the CA students they didn't lay off. If so, your salaries are higher and the firm can save more money <well, at least in the short term> by getting rid of senior staff and using junior staff to step up and try to fill their shoes.

Do the CA who were not laid off really believe that their jobs are safe?

[UFEwriter2009]

We were senior to two of them. The other ones were either on our level or higher - they actually promoted someone who failed SOA last year. We were paid the same as the two CA students that just started. The two of us were likely due for a raise and added responsibility so I think the bottom line came into play and the "tough decision" was made.

From speaking with the other CA students...well, they're upset and pretty discouraged, seeing that the people who succeeded got laid off as soon as they were done and they definitely don't have a sense of job security. I mentioned to the partner that it probably wasn't a smart move from the perspective of boosting employee morale and he told me "life's just not fair."

[taxman]

I think that saving money had something to do with the "tough decision". From what I have seen on forums and heard from friends, it seems that a typical way firms are dealing with recessionary times is to dump the more senior staff and attempt to get by with the junior staff. From the point of view of the firm, it makes sense in the short term provided that the quality of work done does not drop enough so they get in trouble. If the junior staff screw up something, as they will now and then due to inexperience, the partners can get them to fix it on their own time. Morale takes a hit, but the juniors are likely committed to the CA route and know they simply have no choice but to do the extra unpaid overtime.

But, sounds like in your case there are other factors in play too, perhaps the CA students who kept their jobs had a 'guardian angel' partner, or they had a particular skill/experience that was more in demand at this time.

Your partner is right, life is unfair, and the way CAs are trained is no exception. One of the unfortunate aspects of the system is the way the CA student has to make an considerable upfront investment in time, effort and money to get started on the CA path. They make the investment, but sometimes towards the end of the path when they are fully committed, something like a layoff happens and if the student is lacking the required experience, they are at risk of not getting the licence. Given enough time and some luck, they probably will get back into a training firm, but the partners are aware of the desperate situation the student is in and can fully exploit it to squeeze as much work out of them as possible.

[anu]

This is unfortunate that us students that end up facing lay offs. We already go thru hell in first year of the student ca program by facing one exam after another. I know a student who was told two weeks before the UFE, he/she was being laid off the day after the UFE becasue of decrease in clientele. That perticular student was practically thrown into the fire-performing audits without assisstance from seniors (according to the student). All I have to say is guys, be carefull whcih firm you select. Some firms will just throw you in the fire while others will absorb some of the hours in training the junior.

[victorpazos]

Being thrown into the fire without someone more senior being physically present to supervise is something that is not unusual in an accounting firm, regardless of size. It's what firms like to call "on-the-job" training. Eventually, any screw-ups or GAAS deficiencies will be detected when a manager or partner reviews the Junior's work. The negative implication of this is that the Junior feels helpless and it takes a longer time to complete work that would normally take a more experienced staff member less time to complete.

I can imagine now with lay-offs, more juniors are being "thrown into the fire" as more senior personnel get slaughtered out. However, i'm sure from a cost-benefit perspective, the savings from not paying a more senior staff member outweigh the additional costs from junior-caused inefficiencies because of the lower charge-out rates.

[Big4Senior]

Every firm is suffering from cost-cutting and layoffs, especially the east coast. I know that although my firm did not suffer from any layoffs (at least for CAs), cost-cutting has really been hitting on the morale within the firm.
However, by doing so, we did not have to layoff anyone and were able to receive reasonable salary increases. I was surprised to still receive a full 23% increase in salary this year. Guess we were really getting underpaid!

From what I hear, EY Vancouver just laid off another 7 CA students last week. They are targeting CA students who have previously failed CASB modules. It's a tough world for everyone.

I agree with poster above that those seeking to enter the profession should definitely choose their firms carefully - I for one am glad that I did not get an offer for EY, as I had a positive image of them during the recruiting process and probably would have chosen them over my firm if I had a choice. That could have turned out very badly for me.

[Krupo]

I'm really sorry to hear about that news - I'm pretty sure everyone at your former firm is getting some harsh treatment on the severance side. Make sure to consult with a strong employment lawyer to make sure they don't withhold what you're rightfully owed.

This is unfortunate that us students that end up facing lay offs. We already go thru hell in first year of the student ca program by facing one exam after another. I know a student who was told two weeks before the UFE, he/she was being laid off the day after the UFE becasue of decrease in clientele. That perticular student was practically thrown into the fire-performing audits without assisstance from seniors (according to the student). All I have to say is guys, be carefull whcih firm you select. Some firms will just throw you in the fire while others will absorb some of the hours in training the junior.

Being told about a layoff before the UFE is even worse. I can't believe that's happening as well.

This has been blogged - http://www.krupo.ca/archive/2009/10/06/ ... merge.aspx

[wleung35]

Sorry to hear about this. That's definitely ridiculous. I am based in Calgary and I personally knew people from CB who encountered the same situation for prior UFE years as well.

I wish you good luck.