Deloitte and EY, two leading consulting firms, are reducing employees and restructuring operations as weakened demand for advisory services reflects broader economic uncertainty.
Workforce Reductions Amid Declining Demand
Deloitte and EY, two of the largest professional services firms, are cutting jobs as demand for consulting and advisory services declines.
Deloitte recently laid off 250 UK-based employees in October 2024, citing performance concerns. In November, another 180 roles were eliminated as part of a restructuring effort to address challenging market conditions. This was Deloitte’s fourth round of layoffs in just over a year.
EY has also been reducing its workforce. According to EY’s annual report published in October, the company’s head count fell by 2,450 in the year to June 30 — the first decrease in 14 years.
In December 2024, EY announced plans to eliminate 150 roles within its UK consultancy division. The latest cuts will primarily affect senior-level staff, including managers, senior managers, and directors, reflecting continued declines in demand for advisory services.
Both firms have cited economic uncertainty and reduced client spending as key factors behind the job cuts. As consulting firms face slowing growth, they are making structural adjustments to adapt to the changing market environment, signaling a broader shift in the industry.
Slower Revenue and Workforce Growth
Both firms have reported slower revenue increases and hiring rates.
Deloitte, which has a global workforce of 460,000, saw its revenue grow by just 3.1% to $67.2 billion in fiscal year 2024, with consulting services up only 1.9%. This contrasts sharply with the 19.1% growth the firm experienced the year before.
EY’s revenue increased by 3.9% to $51.2 billion, but this was its slowest growth since 2010. The reduced demand reflects broader industry trends, as clients cut back on spending in response to economic uncertainty.
Strategic Adjustments to Meet Market Conditions
To address these challenges, firms are implementing significant changes.
Deloitte consolidated its divisions from five to four to streamline operations, marking its biggest restructuring in a decade.
EY delayed start dates for new hires, reduced internship offerings, and cut pay for some US partners by 2%.
PwC scaled back a popular perk for UK employees, limiting Friday afternoons off during the summer.
These adjustments follow years of aggressive hiring during the pandemic when firms expanded rapidly to meet heightened demand for advisory services.
Adapting to a Leaner Market
Consulting firms are adjusting to slower client spending by rethinking their strategies and focusing on cost control.
The shift comes as economic uncertainty leads businesses to scale back on non-essential advisory work. Accenture, for instance, revised its 2024 revenue forecast due to reduced client budgets.
This period marks a shift for an industry that experienced significant growth in recent years but now faces a more cautious market environment.
Conclusion
As economic challenges persist, consulting firms are adapting by trimming workforces and adjusting strategies, signaling a shift toward leaner operations in a changing market landscape.
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