Deloitte downsizes expenses in response to consulting slowdown

The UK wing of Deloitte’s global network is said to be planning further cost-cutting exercises, as demand for its consulting services continue to slow. Reports from the UK press suggest it will be introducing new measures to downsize expenses and staff travel in 2025.

Major consulting firms have struggled to adjust to adapt to fluctuations in demand since the Covid-19 pandemic. While the Big Four enjoyed a surge in growth amid the crisis period, the years since have seen consulting growth return to normal levels – leaving the firms left with inflated headcounts they had brought on board to cope with that earlier rise in work.

Globally, Deloitte’s revenue growth stagnated at 1.9% in the financial year which ended in May 2024 – compared to estimates of the global consulting sector as a whole enjoying 19% growth. In the UK, the firm also reported muted expansion of 2%, even as the wider membership of the UK’s Management Consultancies Association saw 11% growth over the same period.

As the firm looks to shore up its bottom line, it has committed to a sustained campaign of cost-cutting, with staff in the consulting line bearing the brunt. Since late 2023, the firm has announced over 1,000 layoffs, including most recently, 180 in its UK arm.

As this reorganisation continues, The Financial Times has reported that a Deloitte email sent to partners and directors in October confirms the Big Four firm is introducing “firmwide cost management measures” because of “challenging market conditions” in the UK. The report noted it planned to cut staff travel and expenses by 50%, and that these “limited” and “temporary” changes would be maintained until the end of the 2025 financial year, in May.

The story was confirmed by Business Insider, who requested comment from Deloitte. The firm issued a statement that “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.”

The news comes as 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 is not the only Big Four firm to be taking such measures. Earlier in the autumn, EY announced plans to cut as many as 150 roles in its UK wing. Meanwhile, according to a Wall Steet Journal, PwC US plans to lay off 1,800 employees – or 2.5% of its 75,000-person workforce, while KPMG has similarly announced plans that will affect about 4% of the firm’s roughly 9,000 auditing staff in the US alone.