Deloitte has warned staff that it will slash bonuses and scale back hiring in response to a slowdown in profits this year.
The accountancy giant unveiled the cost-cutting plan in an email to UK staff as bosses said they were responding to an underwhelming performance across its audit and consulting business.
The senior partner at Deloitte’s UK,Richard Houston told staff that the firm’s consulting arm had “faced a particularly challenging year”, which led to a worse-than-expected performance.
Staff in Deloitte’s consulting business will see their bonuses cut by 20% after the unit fell materially short of its performance goals,
Mr. Houston’s email said. He also confirmed that Deloitte will limit promotions to 5,500 this year, with the firm having previously handed out 6,800 promotions in 2024 and 7,000 the year prior. Deloitte’s partners, who took away payouts worth more than £1m in 2024, will also see their pay affected.
Mr. Houston said: “At the start of FY25, we expected greater economic stability and a gradual return of growth opportunities. But an early election, geopolitical complexity and unexpected economic headwinds – like changes in trade policies – have continued to cause market uncertainty.”
In addition to slashing its consultants’ bonuses, Deloitte’s cost-saving measures will see the firm limit pay rises for all UK employees to 2.9% in 2025, compared to the 5% increases handed out last year.
Mr. Houston added that Deloitte’s UK firm will be overhauling its bonus structure to pay out higher bonuses to employees in more profitable segments “to reflect the variations in performance across our businesses.”
Meanwhile, employees in Deloitte’s tax and legal business will be paid full bonuses after a better-than-expected financial performance. The cuts come as other big four accountancy firms have struggled to navigate a recent slump in activity post-Covid, which has led to layoffs across the industry.
A Deloitte spokesman said: “Amid ongoing market uncertainty, we are pleased to be able to recognise our people for their hard work with salary increases, bonuses and promotions this year. “This is alongside other benefits such as fully funded private medical insurance, recently enhanced family policies, and our commitment to offering flexibility and choice in our ways of working.”
Deloitte has been restructuring its corporate finance advisory business, focusing on larger, sector-focused M&A activity. This move has led to proposed job cuts, impacting around 5% of its financial advisory business in the UK. Other Big Four firms, including PwC, EY, and KPMG, have also implemented layoffs and pay freezes due to economic uncertainty.
Read also: DJ Kaycee marks 20 years of thrilling Houston crowds
