Deloitte launched its biggest global overhaul in 10 years as it seeks to reduce costs and the complexity of the organisation in light of an anticipated market slowdown.
Deloitte will reduce its five main business units from 2014 to just four: audit and assurance, strategy, risk, and transactions, technology and transformation, and tax and legal.
One person familiar with the plan said that the reorganisation would reduce costs throughout the company, but a number had not been given yet.
Deloitte has declined to comment if the reorganisation involves job cuts.
A former partner stated: “This isn’t about junior grades. The greatest impact will be felt by partners. “Partners will be removed from management positions.”
Deloitte’s global chief executive Joe Ucuzoglu spearheads the shake-up, which will take an entire year to implement in the 150+ countries where the firm is active.
Ucuzoglu wrote to Deloitte partners in an email on Monday. He said that the plan would “free” them up to focus more time with clients and less on managing staff. Deloitte has about 455,000 employees worldwide.
Deloitte’s global revenue increased by 15 percent to $65bn during its last financial period, confirming its position as the biggest of the Big Four. Deloitte EY PwC KPMG, after years of rapid growth are prepared for a more difficult year as the economic climate in key markets forces companies to reduce spending.
According to a report that includes input from The Big Four, the UK consulting market is expected to stagnate this year, for the first time in 2020.
Ucuzoglu’s move comes after he publicly rejected last year the possibility of splitting its audit and consultancy businesses. EY, the rival firm, spent over a year trying break up the company before giving up in April of last year.
Contrary to the typical multinational, the Big Four operate as a worldwide partnership network linked by a global entity which sets the strategy. Global business is funded through fees paid by local member firms.
Reorganisations can be difficult due to the complex structure, as partners vie for influence. Former Deloitte partners said that the reorganisation “was a pretty divisive issue internally”.
Deloitte will reduce its advisory business, which includes tax and legal, to just three divisions. The audit and assurance unit will continue to exist as a separate entity.
Deloitte will combine its consulting, financial advisory, and risk advisory divisions into two newly-created business units, namely: technology and transformation, and strategy, risk, and transactions.
Deloitte has been struggling to find deals in the past few years. The mergers and acquistions advisory service will be housed under the former. According to an email sent to partners and seen, the technology and transformation unit is bringing together all of its “digital” transformation services including engineering, artificial intelligent, data, and cyber.
Some staff, working in environmental, social, and governance, will be transferred into an expanded auditing and assurance division.
Deloitte is trying to maximize the benefits of its decision to keep auditing and consulting together by keeping tax and legal as a separate business.
EY’s plan to split up failed because the leaders of the company could not agree how tax practices should be divided. PwC has divided tax in its US advisory and assurance businesses.
Ucuzoglu wrote in a letter to partners: “While others are trying to separate this function, we believe our fully integrated suites of tax and legal capability is a significant strength and differentiation that aligns with our clients’ needs.”
According to an email sent to partners, the new structure should be implemented by member firms as early as June 2025.
Deloitte stated that the reorganization would “modernise” and “simplify” its strategy.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.