Deloitte will cut hundreds of jobs across the UK due to a slowing in demand for advisory services from clients in an economic climate that is more difficult.
According to a source familiar with the plans of the accounting firm, it is planning to eliminate approximately 800 jobs from its UK division. This would be equivalent to around 3 percent of the 27,000 employees in the country.
Richard Houston, regional chief executive, said: “Today we have announced some targeted restructuring throughout our businesses which could — subject to consultation — lead to some roles being at risk of redundancy.”
He added, “This is due to a decline in growth which, coupled with the current economic uncertainty, forces us to reconsider the shape of our company and could force us to take some difficult decisions.”
Deloitte, along with the other Big Four firms, are facing a slowdown in demand. The consulting industry has slowed down in the last year, after a boom in 2021-2022 when businesses sought advice about how to handle challenges related to the Covid-19 Pandemic.
In the last year, the professional services sector was hit by both rising costs and a decline in demand from large companies. The interest rate increase has also slowed down the mergers and acquisitions boom that fueled deal advisory work.
According to a person who is familiar with the decision, the move was prompted in part by the slowing of growth in the second halves of the year as clients were more careful with their spending and low attrition.
Deloitte will focus on jobs in the consulting, financial and risk advisory business, as well as in a few roles within its audit and assurance, and in a cross-sector Enabling Functions team.
PwC (another Big Four firm) told its UK staff of 25,000 in June that they should be prepared for smaller bonuses, and possible freezes, this year due to the “challenging market conditions”. The group informed some junior auditors it would freeze their salaries and others that they would be increasing their wages by 3 to 6 percent, which would result in real-terms wage cuts. In July, the annual rate of inflation in consumer prices was 6.8%.
EY announced last month it would be launching a smaller round of redundancies, and warned staff that they should expect less generous bonuses and pay increases this year.
Deloitte UK has been training their team leaders in performance-management, reflecting the growing pressures in an economic environment that is more difficult.
In June, the group stated that it still hired thousands of employees and that reviewing their performance was part of normal management. They also added that “no redundancy programme” was in progress.