Deloitte, one of the Big Four accounting firms, is once again tightening its belt after a tumultuous year marked by reorganization and cost-cutting measures.
The firm has announced plans to reduce spending on staff travel and expenses by over 50% for the remainder of the financial year, a move aimed at navigating the challenging market conditions.
Deloitte Cost-Cutting Measures and Restructuring
In an internal email sent to partners and directors, Deloitte’s Chief Operating Officer, Sarah Humphreys, outlined the firm’s “firmwide cost management measures” as a response to the economic downturn.
The measures include cutting recruitment agency costs, license fees, bad debts, and global recharges.
These steps are described as “limited” and “temporary,” with the goal of maintaining them until the end of the current financial year in May.
The cost-cutting efforts have also included several rounds of layoffs, particularly in the UK, where Deloitte has around 25,000 employees.
In September 2024, the firm laid off approximately 180 staff members, a move described as “necessary to navigate the remainder of a challenging FY25”.
Additionally, UK partners have seen a reduction in pay, with a 4.5% decline in their compensation, leaving them with roughly £50,000 less than the previous year.
Industry-Wide Slowdown and Revenue Growth
Deloitte’s decision to implement cost-saving measures comes in the wake of an industry-wide slowdown in demand for consulting services.
The firm’s global consulting revenues grew by only 1.9% in the financial year ending May 31, 2024, compared to a 19.1% growth the previous year.
The slowdown has prompted Deloitte to restructure its operations, simplifying its core offerings from five to four categories: audit and assurance, tax and legal strategy, risk and transactions, and technology and transformation.
Despite the current challenges, Deloitte remains committed to meeting clients’ needs while continuing to invest in its firm and people.
The firm’s global chief executive, Joe Ucuzoglu, emphasized the importance of freeing up employees to work with clients rather than managing internal staff.
Deloitte’s restructuring efforts are aimed at positioning the firm for future success in a more uncertain economic environment.
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