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Deloitte is to cut hundreds of jobs in the UK as demand slows as clients cut spending on consulting services amid a tougher economic environment.
The accounting firm will cut about 800 jobs in its UK division, equivalent to about 3% of the firm’s 27,000 UK employees, according to a person familiar with the matter.
Richard Houston, regional chief executive, said: “Today we are announcing a number of targeted restructures across our business which may put certain roles at risk of redundancy following consultation.”
“This comes on the heels of slower growth, coupled with continued 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 accounting firms are having to contend with slowing client demand. Consulting work, which saw significant growth in 2021 and early 2022 as companies sought advice on how to respond to challenges related to the Covid-19 pandemic, has slowed over the past year.
Over the past year, however, the professional services industry has been hit by rising costs and falling demand from large companies. As interest rates climb, the mergers and acquisitions boom that drove deal advisory work has also subsided.
One person familiar with the matter said the move was driven in part by slower growth in the second half as customers became more cautious about spending and attrition was lower.
They added that Deloitte will primarily target roles in its consulting, financial advisory and risk advisory businesses, as well as a smaller number of roles in its audit and assurance and cross-functional support function consulting teams.
PricewaterhouseCoopers (PwC), another Big Four accountancy firm, told its 25,000 UK staff in June that it expected pay rises and bonuses to be reduced this year and could be frozen due to “challenging” market conditions. The group told some junior auditors it would suspend their pay and told others it would increase their pay by 3% or 6%, resulting in effective pay cuts. The annual rate of consumer price inflation in July was 6.8%.
Ernst & Young said last month it would launch a round of small layoffs and told employees that pay rises and bonuses this year were not expected to be as generous.
Deloitte has been training its UK team leaders on performance management, reflecting growing pressure in a tougher economic environment.
The group said in June that it was still hiring thousands of people and that assessing performance was a normal part of its management, adding that “no major job cuts” were underway.
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