- Deloitte and EY are trimming employee numbers as the consulting sector faces a slowdown in demand.
- EY's latest financial report showed performance and hiring fell to their lowest levels in 14 years.
- The worst of the slowdown in the sector may already be over, one analyst told BI.
Deloitte and EY have trimmed staff as demand for professional services provided by the two Big Four firms declines.
In the UK, 250 employees working on advisory services have been fired from Deloitte in recent weeks, The Financial Times reported.
A source with knowledge of the matter told Business Insider that about 1% of the UK workforce had left the company as part of internal "performance management processes."
It was the third time in 13 months that the Big Four firm had laid off workers, the FT reported. Deloitte declined to comment on the latest layoffs.
Deloitte is the world's largest professional services firm in the world by revenue and employees. Its most recent financial report, published in September, revealed that hiring and earnings have slowed in the last year.
Deloitte's global workforce expanded to 460,000 in the 2024 financial year, an increase of 3,000. Tens of thousands of new hires were made in the previous two years.
Global revenue was up 3.1% to $67.2 billion. In the 2023 fiscal year, the firm reported a 14.9% increase.
Consulting revenues contracted significantly, with year-on-year growth falling from 19.1% in the 2023 fiscal year to 1.9% in 2024.
Big Four counterpart EY has been headed in a similar direction, its annual report published Thursday showed. It showed employee numbers fell by 2,450 in the year to June 30 — the first decrease in 14 years.
Revenue was up 3.9% on the previous year to $51.2 billion. This amounted to the firm's poorest performance since 2010.
Major consulting firms are experiencing a slowdown in demand for advisory services. Professional services firm Accenture cut its revenue forecast for 2024 from between 2% and 5% to between 1% and 3%. The firm cited the "uncertain macro environment" for its reduced expectations and said that clients continue to cut back.
The trend has hit particularly hard given many of the firms went on a hiring spree during the pandemic as businesses looked for advisory support to handle to the impacts of the pandemic. In the 2023 fiscal year, Deloitte expanded its UK team alone by 7,000 employees.
Aside from workforce reductions, consulting firms are also introducing new policies as they face up to an industry slowdown.
PwC has ended its "Summer Fridays" perk that allowed UK staff to take Friday afternoons off for three months of the year. They were only permitted to do so for two months in 2023 and six weeks in 2024.
In March, Deloitte launched "the biggest overhaul of its global operations in a decade," the FT reported. The overhaul will take a year to implement and will see the business cut itself down from five to four divisions in an effort to slash costs.
For the second year running, EY has delayed start dates for some new hires. The firm has also reduced the number of internships available next summer and cut pay by roughly 2% for some of its US partners.
The worst may be over
The firm told Business Insider that the decision to delay was made to help ensure new joiners would have "the quality and breadth of assignments to ensure a successful start and strong professional trajectory."
The worst of the slowdown in the sector is likely already over, said James Callander, managing director of Freshminds, a UK-based consulting recruitment firm.
Callander said the policies and workforce reductions that have been implemented will balance the amount of talent with the amount of work. He added that there's often a lag between the data on workforce numbers and the reality of the business.
Callander was optimistic that the market would pick up by 2025: "Companies and businesses going through change and growth will always require professional advice."
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