Deloitte, EY cut staff in UK amid decline in demand for advisory services

Deloitte recently laid off around 250 advisory staff members in the UK, while EY's annual report on Thursday revealed a reduction of 2,450 employees over the past fiscal year, a first in 14 years

Deloitte and EY, two of the ‘Big Four’ professional services firms, have begun reducing their workforce as demand for consulting and advisory services declines. Deloitte recently laid off around 250 advisory staff members in the UK, as reported by The Financial Times. 

 

These layoffs affected about 1 per cent of the firm’s UK workforce, part of routine ‘performance management processes’. This marks Deloitte’s third round of layoffs in just over a year, the report said.

 

Deloitte, the largest professional services provider by revenue and personnel, reported slowed hiring and earnings in its latest financial update. Its global workforce expanded to 460,000 employees in fiscal year 2024, a modest increase compared to previous years. While the firm’s total revenue grew by 3.1 per cent to $67.2 billion, consulting services saw only 1.9 per cent growth in 2024 compared to a robust 19.1 per cent the year before.

 

 

Workforce contraction for first time in over a decade

 

Similarly, EY’s annual report on Thursday revealed a reduction of 2,450 employees over the past fiscal year, the first decline in 14 years. Although EY’s global revenue increased by 3.9 per cent to $51.2 billion, this marked its lowest growth rate since 2010, The Financial Times said. 

 

The downturn aligns with industry trends: consulting firms are feeling the effects of reduced client spending in an uncertain economic environment. For example, Accenture recently revised its 2024 revenue forecast, citing that clients are scaling back on advisory services.

 

How are firms adapting to market changes?

 

To counter the industry slowdown, consulting firms have introduced new policies and structural changes. In March, Deloitte launched its most significant operational restructuring in a decade, consolidating from five divisions to four to streamline costs.

 

EY has also delayed start dates for new hires, reduced internships for next summer, and implemented a 2 per cent pay cut for some US partners.

 

PwC also scaled back its popular ‘Summer Fridays’ perk for UK staff, reducing the period in which employees can take Friday afternoons off.

 

This wave of changes follows a hiring surge during the pandemic when firms added thousands of employees to manage increased demand for advisory services, particularly in areas impacted by Covid-19. However, with demand now tapering, firms are adapting to the new, leaner market reality.