FirstFT: EY Germany to axe hundreds of jobs in post-Wirecard cut

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EY Germany is planning to cut 40 partners and shed 380 staff as the Big Four firm attempts to improve profitability after the damage caused by the Wirecard scandal.

Most of the job cuts are aimed at reducing back-office costs at the German business, one of the largest in EY’s 150-country operations, four people familiar with the matter told the Financial Times.

The majority of the 40 partners heading for the exit are in the firm’s audit practice, accounting for about 5 per cent of the equity and salaried partners in the German business.

EY lost several big audit mandates in Germany, including Commerzbank, DWS and KfW, after its involvement in the Wirecard scandal, in which it failed to spot over several years that half of the payment group’s reported revenues and billions of euros of corporate cash did not exist. The fintech went bust in 2020 in one of Europe’s most spectacular accounting frauds.

The redundancy plan is the latest in a series of cost-cutting measures in the Big Four accounting firm’s international network as it responds to economic uncertainty and tries to boost the valuation of its global consulting business ahead of a split from its audit operations.

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2. Musk says Tesla could sell 2mn Teslas Elon Musk said Tesla could deliver as many as 2mn cars this year after it dramatically cut prices to attract customers at the short-term expense of margins. The company’s chief executive sought to allay investor worries and said the electric vehicle maker was seeing orders at almost twice the rate of production.

3. Big Oil profits set to slow Oil companies are forecast to earn tens of billions of dollars in fourth-quarter profits when they start reporting earnings this week, but the outlook is dimmer for 2023: early projections have the five western supermajors collectively earning $150bn, down from an estimated $200bn haul last year. Still, the 2023 forecast, if it pans out, would be the second-highest earnings ever recorded.

Column chart of Profits for western oil supermajors, $bn showing Big Oil’s profit bonanza

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The day ahead

Economic data South Africa has its producer price index for December and results from its central bank’s monetary policy committee meeting. The US releases consumer spending figures and flash gross domestic product figures for the fourth quarter. The UK has labour productivity numbers for the third quarter, and Spain and Norway publish unemployment rates.

Corporate results Banco Sabadell, Comcast, CVS Group, Diageo, Fevertree Drinks, Foxtons, Intel, JCDecaux, JetBlue Airways, LVMH, Marsh & McLennan, Mastercard, Nokia, Northrop Grumman, Salvatore Ferragamo, Rank Group, SAP, St James’s Place, STMicroelectronics, Telia, Tate & Lyle, T Rowe Price, Visa, Volvo Group and Wizz Air report.

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Opinion: Carelessness is killing Sunak’s efforts Carelessness — the excuse offered by UK Conservative party chair Nadhim Zahawi for his tax missteps — is becoming a defining trait of the Tories, writes Robert Shrimsley. Beyond Zahawi, Prime Minister Rishi Sunak, plagued by a series of mini scandals, is also starting to look weak.

Take a break from the news

Through the sensual and alluring medium of paint, women artists are delivering complex, individual narratives in a way that somehow also feels universal. HTSI explores how female artists are reinventing the nude.

A painting entitled Sundials and Sonnets by Wangari Mathenge shows a woman reclining on a yellow sofa
Sundials and Sonnets, 2019, by Wangari Mathenge © Robert Wedemeyer. Courtesy Wangari Mathenge and Roberts Projects Los Angeles, California

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