What are the chances of rescinding of offers by any of the BIG4 firms due to the COVID_19 and the recession thereafter?

Coronavirus covid19 Offer_rescinding.
New answer on Mar 28, 2020
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Anonymous A asked on Mar 27, 2020

I have been offered a positon of consultant by one the BIG4 firms in the domain of Technology consulting. I have been given the offer in the month of october through Campus Hiring process. My course is scheduled to end by MAY 2020 and I am expected to get the joining dates by JULY end as mentioned in the lOI.Till now I have only recieved the letter of Intent form the company confirming my offer, that required me to confirm my acceptance which I did well before time.Recently I heard that due to the prevailing crisis the managemnet have decided to freeze all hiring including campus hiring, many of my seniors working there confirmed the announcement. What does this hiring freeze signify? How likely is it that my offer would get rescinded in this particular case?

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Luca
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replied on Mar 27, 2020
BCG |NASA |20+ interviews with 100% success rate| 120+ students coached |GMAT expert 780/800 score

Hello,

It would be extremely difficult to rescind the contract, if it's a full-time offer. Once that they send you the job offer, they are formally committed to the offer. It's likely that they will just postpone your start by some months (I've heard around half an year in some cases),
Don't be afraid to contact the HR staff if you want to discuss this with them, they are there to help.

Best,
Luca

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Anonymous A on Mar 27, 2020

Thank You Luca for answering.

Francesco
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replied on Mar 28, 2020
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Hi there,

I don’t think this is likely to happen for major firms, mainly for the following reasons:

  1. Legal. Unless there is a clause the company can cancel the offer, doing so creates a breach of contract
  2. Reputation. Rescinding offers will affect the general reputation of the company
  3. Alternatives. It is just easier for the company to suggest postponing the start date rather than canceling the offer and lose the suitable candidate

Best,

Francesco

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Clara
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replied on Mar 27, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

What is for sure is that the COVID19 is truly harming economy, and in the next weeks we will see whether we are heading to a global economic recession.

If this is the case, and we indeed face a global recession -even if not as hard as the previous one-, this will have an impact in consulting. Why? Simply because there would be less clients, less engagements with the usual clients, and an overall freeze in spending.

This, for sure, will impact recruiting, reducing the classes of BAs and Associates for a couple of years.

What about offers being rescinded and lay-offs? Is too soon to assess this yet. Furthermore, MBB are still working, we are not in the point in which they stop their business. What is for sure is that promotions and MBAs sponsoship will freeze, as well as hiring. If this continues like this, the utilization of some consultants will be very low and they will be "advise to leave"

Hope it helps!

Cheers,

Clara

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Daniel
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replied on Mar 27, 2020
McKinsey / ex-Interviewer at McKinsey / I will coach you to rock those interviews

I see the stop of recruiting as a real possibility, but rescinding the offers is unlikely.

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Robert
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replied on Mar 28, 2020
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Hi Anonymous,

I fully agree with Clara - for now the middle-term impact is not foreseeable.

Needless to say, we are currently in a global situation of uncertainty and political actions like not having been since long long time ago. It will definitely have an impact on consulting industry since some consulting projects and budgets are temporarily already frozen - people sitting a bit on the sideline to observe what is going on. However, once the uncertainty is going away, typically consulting projects are taking up speed again - think specifically about cost cutting and reorganizations. And for that, consulting firms also want to be prepared human-resource-wise.

In addition, it's a small industry and rumors easily go around - and it doesn't sound good within the industry, and even worse for the image for future applicants. So if it's reasonably possible to avoid, they will avoid cancelling issued offers .. under normal circumstances, and we need to wait and see for the moment what the current pandemic makes out of that!

Hope that helps - if so, please give it a thumbs-up with the green upvote button below!

Robert

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Anonymous replied on Mar 28, 2020

Hey A,

you are not alone - this is one of the FAQ of my mentees these days.

Don't worry, your offer will not be rescinded, but most probably, you will be asked to start in Fall 2020 instead of summer, when the business activity is usually higher.

Good luck,

André

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Luca gave the best answer

Luca

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