Deloitte cuts 7,000+ jobs in US, Australia and India
Deloitte could be set to offload more than 10,000 of its global staff in the wake of the coronavirus crisis. The firm’s CEO has been far from conciliatory while the first wave of redundancies begins, however, with Punit Renjen having issued a series of statements celebrating Deloitte’s recent financial performance, and lauding its historic support for staff “through wars, recessions and pandemics.”
The consulting industry stands to take a sizeable hit from the Covid-19 crisis, and according to the latest estimates, it will be worth around 18% lower at end of 2020 as a result. The drop of $28 billion currently forecast could prove catastrophic to even the largest players in the industry – though it might be hard to tell from the victorious tone of Deloitte’s Global CEO when discussing his firm’s anticipated results for 2020.
The UK consulting industry may well face a worse fall in revenue than many of its international counterparts – with the country currently facing a more-than 20% fall in GDP in 2020 thanks in part to the Government’s contradictory messages on the severity of the pandemic, a delayed imposition of a lock-down, and stringent cuts to healthcare spending being maintained during the crisis. The large impact of coronavirus and the continued uncertainty of Brexit mean the UK is currently facing a 22% decrease in revenues.
With that in mind, those employed by the UK wing of global consulting and audit firms such as Deloitte will be looking on anxiously, as their global parent firms make swathes of layoffs elsewhere. On record, the number of people axed at Deloitte already stands at around 7,500 – including a huge 5,000 professionals in the US, 1,500 in India, 700 in Australia and 200 in Canada. However, the real number of former staff left fuming at their CEO’s arguably tone-deaf statements may actually be even higher.
Based on global tips received from sources close to the story, Consultancy.org estimates that the number of jobs lost is actually closer to 10,000 – and worse still, in the long-term, the full scale of the layoffs is likely to stretch even further. Deloitte’s strong financial position had seen it defer the hit it would take from Covid-19. Deloitte’s financial year runs from June to June, and in the first three quarters of its current financial year it was business as usual, gaining close to double digit growth globally.
In the fourth quarter of Deloitte’s financial year, as the pandemic hit, its growth plummeted. Now, as the firm enters the first quarter of its new year, it is already moving quickly to recalibrate its workforce in its strongest market of the US. With several larger members firms in Asia and Europe yet to announce job cuts, they will likely follow suit as even the firm’s presence in the world’s largest consulting market could not avoid such measures.
On the surface of it, Deloitte’s UK operations seemed to receive a glut of work during Covid-19. A heightened number of insolvencies have kept the firm’s restructuring wing busy, while Deloitte was also often involved in the Government’s response to the crisis, as well as supporting financial institutions with their efforts to bolster smaller businesses. However, the firm’s consulting work is understood to have been hit hard, along with several other key service lines. In that case, it seems likely that the UK will also see large cuts, like its US equivalent.
Employee support
The current campaign of cuts at Deloitte does not seem to have dampened the spirits of Global CEO Punit Renjen, however. In a buoyant company-wide email circulated across Deloitte’s international operations, Punit Renjen was in nothing short of a celebratory mood, stating that despite the current Covid-19 crisis, Deloitte will end the year in a strong position. Apparently, Deloitte has forecast a global aggregate revenue of $48 billion, with a growth of 6% – securing its status as the largest of the world’s four biggest professional services firms by revenues. Deloitte has been in that position since taking over the mantle from PwC in 2016.
.@Deloitte has a long history of helping our people, clients and communities thrive through wars, recessions and pandemics. #Resilience is a part of our DNA as we continue to make an impact in the age of #COVID19. #Deloitte175https://t.co/3m8Rq3xBh5
— Punit Renjen (@PunitRenjen) June 8, 2020
Renjen told Deloitte’s staff that this played into the firm’s ultimate “aspiration” of “undisputed leadership” – before adding that while “a pandemic impacts that journey – the story of FY20 being a tale of two halves – but it does not change the trajectory.” The braggadocios tone of his first email was further added to later, when Renjen took to Twitter to further commend Deloitte’s performance amid the lock-down.
“@Deloitte has a long history of helping our people, clients and communities thrive through wars, recessions and pandemics,” Deloitte’s Global CEO stated. “#Resilience is a part of our DNA as we continue to make an impact in the age of #COVID19.”
The statements will provide more than a few raised eye-brows across the consulting and audit firm’s staff, thousands of whom have just been handed their marching orders as Deloitte tightens its belt across its global presences. Employees who have been told their services are no longer required may be left wondering just why they have been axed if the firm is enjoying such a great year, and wondering how exactly they are being “supported” through this particular pandemic.
Earlier in the month, Grant Thornton became the first top-table professional services firm in the UK to announce layoffs. The firm came under fire for its decision, announcing around 70 jobs in its tax and consulting divisions would be made redundant, having declined to use the Government’s job preservation scheme.
A comment from the company sought to address this, stating, “The furlough mechanism was designed to preserve roles that had temporarily diminished or ceased as a result of Covid-19 and where there is a reasonable prospect of that work returning as the UK comes out of lockdown. As these roles at risk were deemed unsustainable in the future, it would be inappropriate for them to be furloughed.”
Some workers disagreed with that stance though. Commenting on the news, one employee told the Financial Times, “It is hard to accept that the firm refused assistance from the Government’s job retention scheme… Clearly being on the furlough scheme until October 31 and then facing redundancy is better for an employee than being made redundant in July.”
