Deloitte, a prominent member of the Big Four accounting and consulting group, has recently trimmed around 250 members of its UK workforce, marking the third instance of job cuts within the last 13 months. Primarily affecting the advisory departments, these cuts have been silently conducted without official announcements within the company or its individual sectors. According to insiders, the cuts, which total 1% of Deloitte’s UK staff, is a consequence of the company’s performance management procedures.
The decision was made just weeks following Deloitte’s declaration that its 749 UK equity partners had earned over £1 million each on average in the past four years – despite a considerable drop in sales growth during their recent financial year. Richard Houston, the Chief Executive and Uk Senior Partner of Deloitte, had previously stated that the company would need to scrutinise their expenditures and make some challenging decisions.
The recent layoffs replicate last September’s warning by Deloitte that around 800 employees would be made redundant due to a decrease in demand for their services, and a subsequent dismissal of 100 roles in February as part of their corporate advisory department’s reorganisation. Such actions emphasise the ongoing downturn in the broader UK consulting industry, impacting Deloitte’s advisory departments.
Deloitte’s consulting division, its biggest service line, reported a 1% reduction in revenue for the year ending May. During the same timeframe, sales also dropped by 2% in its financial advisory department. Deloitte and its Big Four counterparts (EY, KPMG, and PwC) had previously expanded their staff to manage a demand surge due to the pandemic – however, job cuts have been carried out throughout the last year due to a market slowdown.
About the recent job cuts, Deloitte has not made any official company-wide or department-wide declarations; some leaving employees were even asked to sign non-disclosure agreements. Another source stated that the impacted staff were given “appropriate payments for notice”.
Deloitte’s recent unannounced layoffs mirrored a similar situation at competitor PwC earlier this year, where departing staff were instructed not to discuss the reasons for their exit. If they wished to send farewell notes to teammates, they were provided with a prescribed language.
In recent times, Deloitte has significantly modified its UK operations, part of a worldwide reconfiguration of the company’s service channels. The firm’s primary divisions have now been streamlined to four from the previous five, inclusive of – audit and assurance, strategy, risk and transactions, technology and transformation, and tax and legal. The five divisions structure was in place for the past ten years.
When asked, Deloitte refrained from making any comment regarding these changes. – Copyright The Financial Times Limited 2024.