Big Four professional services group contends with slowing demand
Deloitte is set to cut hundreds of jobs in the UK as the Big Four professional services group contends with slowing demand from clients cutting their spending on advisory services in a tougher economic environment.
The accounting firm is set to cut approximately 800 jobs in its UK division, according to a person familiar with the plans, equivalent to about 3 per cent of its workforce of 27,000 people in the country.
“Today we announced some targeted restructuring across our businesses, which may — subject to consultation — put some roles at risk of redundancy,” said regional chief executive Richard Houston.
“This follows a slowdown in growth, which, combined with the ongoing economic uncertainty, means we have to consider the shape of our business and may mean we have to make some difficult decisions,” he added.
Deloitte and the other Big Four firms are having to contend with slowing demand from clients. Consulting work slowed in the past year after enjoying bumper growth in 2021 and early 2022 when companies were seeking advice on how to deal with challenges linked to the Covid-19 pandemic.
The professional services sector has, however, been hit by rising costs and falling demand from big companies over the past year. A boom in mergers and acquisitions that drove deal advisory work has also abated as interest rates have climbed.
A person familiar with the decision said the move had been spurred in part by slowing growth in the second half of the year due to clients being more cautious with their spending as well as low attrition.
Deloitte would mainly target jobs in its consulting, financial advisory and risk advisory businesses as well as a small number of roles in its audit and assurance and a cross-sector Enabling Functions advisory team, they added.
PwC, another Big Four firm, told its 25,000 UK staff in June to expect smaller pay rises and bonuses and potential freezes this year as a result of the “challenging” market conditions. The group told some of its junior auditors that it would put their pay on hold and told others it would increase their wages by 3 or 6 per cent, resulting in real-terms pay cuts. The annual rate of consumer price inflation stood at 6.8 per cent in July.
EY said last month that it was launching a small round of redundancies and told staff to expect less generous pay rises and bonuses this year.
Deloitte has been training its UK team leaders in performance management, a reflection of growing pressure in a tougher economic environment.
The group said in June that it was still hiring thousands of people and that reviewing performance was a normal part of its management, adding that “no material redundancy programmes” were under way.
Source: Financial Times
