- Deloitte UK is getting into the holiday spirit a bit early this year – by handing out pink slips instead of presents to its employees – trimming 180 roles across its UK advisory divisions!
- Insiders shared that the Big 4 giant notified impacted employees on Tuesday, November 19, as part of a restructuring initiative.
- But here’s the twist; UK law requires companies planning over 100 redundancies to consult for a minimum of 45 days before any layoffs can take effect.
Divisions affected
Deloitte is laying off 180, representing less than 1% of Deloitte UK’s 27,000 workforce!
The latest round of job cuts at Deloitte is set to impact teams in the following divisions,
- Strategy, Risk & Transactions
- Technology & Transformation
This news comes right after Deloitte UK announced that 749 Equity Partners pocketed an average of £1 million for the fourth consecutive year.
Big bonuses still rolled in, even though sales growth took a sharp downturn for the financial year ending in May 2024!
Not Deloitte UK’s first layoff in 2024…
In February 2024, it laid off an additional 100 employees.
In the fall, they also bid farewell to 250 advisory staff who, according to the firm, didn’t quite cut.
Looking back, Deloitte has made similar moves in recent months: in September 2023, the firm announced a whopping 800 job cuts.
What’s driving the job cuts?
According to Deloitte’s official announcements, the firm has been going through some tough times.
Deloitte’s UK Senior Partner and CEO, Richard Houston, sounded the alarm, emphasizing the need to “carefully consider our cost base and make some difficult choices this year.”
These choices have included layoffs and operational restructuring to address the impact of challenging market conditions.
Targeting Underperformance
In Feb’24 Deloitte dismissed approximately 250 advisory staff deemed “underperforming”, according to Financial Times.
Declining M&A Activity
Operational Restructuring
In March 2024, Deloitte launched its most significant reorganization in a decade:
Consolidated Divisions: The firm reduced its UK business units to 4 from 5:
- Audit and Assurance
- Strategy, Risk, and Transactions
- Technology and Transformation
- Tax and Legal
This move aimed to streamline operations and reduce costs in a bid to adapt to evolving market demands.
Over-hiring during the Covid-19 Pandemic
During the pandemic, consulting firms experienced a surge in demand, particularly in areas impacted by Covid-19.
To keep up, they expanded aggressively, adding thousands of employees.
However, as the market normalized, this rapid growth left firms with bloated workforces and excess capacity.
Also Read: KPMG US Audit Team Laysoff Team Members
UK consulting market slows down
The UK consulting market grew by just 4.7% in 2023, a sharp decline from the 15.6% growth seen in 2022.
While the global financial services consulting market is projected to grow by 5% in 2024, the UK market is expected to shrink by 2% (Source Global Research).
Deloitte UK’s revenue performance
Deloitte UK reported a mixed performance for the financial year ending May 31, 2024.
While overall revenue reached a record £5.75 billion, some key divisions faced headwinds.
- Consulting Revenue: Dropped by 1%, declining from £1.6 billion to £1.58 billion.
- Financial Advisory Services: Fell by 2%, with revenues decreasing from £669 million to £653 million.
- Average Profit Per Equity Partner: Declined slightly by 5% to £1.012 million.
- Risk Advisory: Steady performance with revenues of £495 million, driven by demand in financial risk, cybersecurity, and regulatory compliance.
- Distributable Operating Profit: Steady at £756 million.
- Whereas, Deloitte’s global revenue grew 3.6% to $67.2 billion in FY 2023-24.
Strategic Investments Amid Tough Times
- Despite challenges, Deloitte hired 3,387 new colleagues and promoted 6,800, including 80 new partners.
- Increased average pay by 5% and enhanced employee benefits, such as equal parenting leave.
- They invested £135 million in technology, including artificial intelligence, to enhance client services and operations.
Also read: Deloitte ₹20K Cr revenue goal: Fastest-growing Big 4
Not the only Big 4 to cut jobs!
EY: Reduced 2,450 employees, marking its first workforce decline in 14 years. Despite this, EY’s global revenue grew 3.9% to $51.2 billion, as noted by The Financial Times, which is the slowest since 2010.
PwC: Cut 600 roles in the UK
However, The Financial Times reported earlier this year that PwC UK conducted “silent layoffs”. Employees who accepted voluntary severance packages were reportedly being asked to keep the reasons for their departure confidential.
1,800 in the US (2.5% of its workforce) as part of restructuring in its technology group, with some employees taking voluntary severance under confidential terms.
KPMG: Eliminated 200 UK roles (back-office and client-facing) and plans to reduce its US auditing workforce by 4%, affecting around 9,000 employees.
Also Read: Big 4 service delivery centre in India QUIETLY fired hundreds of employees!
For all of us in India…How is Deloitte India performing…
Under Romal Shetty’s leadership, Deloitte South Asia is excelling!
As reported by the Economic Times, Deloitte India is on its way to quadruple its revenue to $5 billion (approx. ₹40,000 crore) by 2030.
- Deloitte India already crossed ₹10,000 crore revenue milestone in FY 2023-24 (June 2023-May 2024), growing at a robust 30% (Second firm after EY India to surpass ₹10,000 crore in revenue)
- India contributed 10% to Deloitte’s global revenue growth and 70% to the Asia Pacific region’s growth.
- Expansion is supported by an unprecedented hiring spree of 40,000–50,000 new employees in the coming years.
- Deloitte India’s workforce now stands at 1.2 lakh, with over 25,000 hires last year.
- The attrition rate fell from 29% to 13%, significantly lower than the Big Four average of 20%!
Silent firing in Big 4s in India?
For instance, in July -August 2024 there was a deluge of CVs in the market from those working in the Big 4s delivery centres.
But this one particular Big 4 Service Delivery Centre has caught everyone’s attention – As approximately 250+ people have been forced to resign or faced with stalled promotions, leading them to resign voluntarily.
Some insiders report that the actual number could be much higher!
Employees with 2-5 years of experience are the hardest hit, and mind you, all of them are CAs or CPAs!
However, many argue that this practice has been quietly ongoing for years.
