By Consultants Review Team
Deloitte and EY, two of the 'Big Four' professional services organizations, have begun to reduce its personnel as demand for consulting and advisory services falls. According to reports, Deloitte recently layoff approximately 250 advising staff workers in the UK.
These layoffs affected approximately 1% of the firm's UK staff as part of standard 'performance management measures'. The report stated that this is Deloitte's third round of layoffs in just over a year.
Deloitte, the largest professional services provider by sales and personnel, reported reduced hiring and earnings in its most recent quarterly update. Its global workforce rose to 460,000 employees in fiscal year 2024, a minor increase from the preceding years.
While the firm's total income increased by 3.1% to $67.2 billion, consulting services gained only 1.9% in 2024, compared to a robust 19.1% the previous year.
Workforce decline for the first time in over a decade
Similarly, EY's annual report on Thursday disclosed a 2,450 personnel reduction over the previous fiscal year, the first drop in 14 years. Despite a 3.9 percent gain in global sales to $51.2 billion, EY's growth pace was the slowest since 2010, according to the Financial Times.
The downturn is consistent with industry trends, as consulting businesses are suffering the effects of lower client spending in an uncertain economic environment. Accenture, for example, recently lowered its revenue prediction for 2024, citing a decrease in demand for advisory services.
How are companies adapting to market changes?
To combat the business slump, consulting firms implemented new rules and structural reforms. Deloitte embarked on its most substantial operational reform in a decade in March, merging five divisions into four to reduce expenses.
EY has also pushed back start dates for new hiring, decreased internships for next summer, and adopted a 2% compensation cut for some US partners.
PwC also reduced its popular 'Summer Fridays' benefit for UK employees, limiting the time when employees can take Friday afternoons off.
This round of adjustments comes after a hiring boom during the pademic, when organizations added thousands of personnel to meet increasing demand for advising services, particularly in areas affected by Covid-19. However, as demand declines, businesses are adapting to the new, leaner market realities.