Deloitte to cut bonuses and promotions as British wing misses targets
Deloitte’s muted global revenue growth means the Big Four firm has once again resolved to shore up profits by cutting back on labour costs. In the UK, the consulting and accounting giant will slow promotions and reduce bonuses – having already downsized its headcount significantly.
Recent years have seen the world’s largest consulting firms struggle 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 period following has seen consulting growth return to normal levels – leaving the firms left with inflated headcounts they had brought on board to meet with that earlier boom in demand.
As that trend continues, Deloitte’s global revenue for the 2024 financial year rose by 3.1% to $67.2 billion. While that would constitute significant growth for many other players in the sector, it is a steep decline from the 14.9% growth recorded in 2023. And even though it helped deliver record profits for Deloitte, that was on the back of dramatic cuts across its global operations.
In the UK, Deloitte is set to continue that trend, with an internal memo reportedly outlining reductions in bonuses, and in promotions across its technology and transformation consulting division. According to Business Insider, the note from UK Chief Executive Richard Houston said that Deloitte would promote around 5,500 UK employees. This would be roughly 25% of its workforce, having been 28% the year prior.
But more specifically, the note singled out the technology and transformation practice, with average bonuses in the division would be slashed to 80% of the standard annual amount. Houston wrote that it had “faced a particularly challenging year and fell materially short of its performance goals.”
Next financial year
Despite the division’s underperformance, Deloitte’s total UK profits for the 2025 financial year are expected to come in “slightly ahead of last year,” though “below our original plan,” according to Houston. As a result, even partners in the technology and transformation division would see a cut to their rewards this year – marking a shift in how bonuses are allocated at Deloitte.
Payouts are now weighted not only to individual performance but also to the financial performance of each of Deloitte’s four UK business units. This means that while technology and transformation staff will face cuts, those in the other three divisions – covering deals, tax and legal, and audit and assurance – will continue to receive full bonuses.
One insider from the technology and transformation business commented anonymously to the press that morale had been “dampened” by the “beating” the unit received. They added that it had historically “pulled the firm forward in times of crisis”.
But while multiple global elections, geopolitical complexity, and unexpected economic headwinds have continued to cause market uncertainty, clients are not turning to Deloitte’s advisory services as they might once have. In part, this could be due to cut-price alternatives from boutique consultancies becoming a more viable alternative – or it could also be a sign that the broader consulting industry’s pivot to AI transformation is struggling to resonate with consultants.
The technology had long been primed as the next big thing by the consulting firm, but in the years since it came to prevalence – when clients might have been expected to tap advisors to transform into AI-driven organisations – the industry has struggled. In the case of Deloitte, targets have been missed, and pay and headcounts cut. But more broadly, the consulting sector has seen its first shrinkage in revenues since the pandemic.
