-
Deloitte UK has had a year of reorganization and cost-cutting amid a consulting slowdown.
-
A report said it planned to cut staff travel and expenses by more than 50% through May.
-
In an email cited in the report, a senior exec described the spending cuts as short term.
The Big Four consulting firm Deloitte wants to cut its spending on staff travel and expenses by more than 50% in the UK, where it is headquartered.
The Financial Times reported that in an email sent to partners and directors in October, Deloitte said it was introducing “firmwide cost management measures” because of “challenging market conditions” in the UK.
Deloitte reportedly said it was aiming to maintain the cost cuts until the end of its financial year, in May, and described the reduction in spending as “limited” and “temporary.”
The email was sent by Sarah Humphreys, the chief operating officer of the tax and legal division. Humphreys said Deloitte was also reviewing its “recruitment agency costs, licence fees, bad debts and global recharges,” the FT reported.
The cost-saving efforts come after a year of reorganization and redundancies at Deloitte as it grapples with an industrywide slowdown in demand for consulting services that has hit revenue growth.
Deloitte’s global consulting revenue grew by 1.9% in the financial year that ended on May 31. In the previous year it grew by 19.1%.
“Like many organisations, we are looking carefully at our costs to ensure we’re able to meet clients’ needs while continuing to make investments in our firm and our people,” Deloitte said in a statement shared with Business Insider on Monday.
The downturn comes after many consultancies hired aggressively during the pandemic.
In March, Deloitte carried out a global overhaul of its operations aimed at cutting costs and repositioning it for future success. It reduced its core offering from five categories to four: audit and assurance, tax and legal strategy, risk and transactions, and technology and transformation.
It has also conducted several rounds of layoffs in the UK, where it has about 25,000 employees. In internal messages seen by Business Insider, Deloitte said recent layoffs of about 180 staffers were “necessary to enable us to navigate the remainder of a challenging FY25.”
The firm has also cut UK partner pay to save on costs, leaving the most senior class of employees with roughly £50,000 less than in the previous year, a 4.5% decline. UK partners still took home an average of about £1 million, or about $1.2 million, for the fourth year running.
#Deloitte #trimming #costs #year #upheaval
Leave a Reply