As Deloitte commences a landmark restructuring of its operations, amid a consulting market slowdown, employees are reportedly weighing up their other options. However, the same pressures which have triggered Deloitte’s changes are increasingly leading other top firms to freeze hiring and cut jobs.

The number of job vacancies at UK consultancies tumbled by over 80% in 2023, even as revenues continued to climb for the industry. Illustrating the extent of this, data from labour market analytics firm Vacancysoft – originally reported on by Bloomberg – found that McKinsey and Company, Bain & Company, Boston Consulting Group and Accenture posted just 248 jobs in 2023 – down from 1,389 in 2022 and 1,764 in 2021.

For this reason, even though the consulting industry is in many ways enjoying healthy results, experts assert that firms ‘over-hired’ amid the deals-boom that followed the Covid-19 lockdown period. For example, James O’Dowd – a managing partner at specialist recruitment firm Patrick Morgan – told City A.M. that major consulting firms had an annual churn rate around 20-25% in pre-covid times, but they had kept hiring according to this, when the context had changed.

“This year,” O’Dowd explained, “strong economic headwinds have led to a decrease in [churn] to as low as 3%, due to fewer opportunities available for consultants to leave their current firms. This, coupled with the over-hiring in 2022, has significantly reduced hiring needs.”

The Big Four were no exception to this trend. Across Deloitte, PwC, EY and KPMG, UK vacancies dropped by 60% to 2,767 last year, when the previous year, the job postings were more than 10,000. But even this drastic change does not seem to be enough – and a growing sense of apprehension is now pervading the quartet that significant job cuts may be on the horizon.

Deloitte

Together, the Big Four employs more than 80,000 people in the UK. Most prominently, Deloitte has already kicked off plans to trim its own share of that – and so far aims to shed over 800 roles across its British operations. Almost a fifth of the jobs lost will be from junior consultants.

Deloitte’s global chief executive Joe Ucuzoglu is more broadly looking to simplify the business, though, in a way which one retired Deloitte partner recently told Financial News London “I presume there will be some job cuts… mainly about simplifying the business and making it easier for clients to access different services.”

Another former Deloitte consultant suggested just what this kind of simplification might help with. Noting “a real pain” that they encountered during their time there, the former employee noted they had seen “two teams from Deloitte turn up at the same client to tender – one was from audit assurance and the other risk advisory.” Not only was this “bad for business”, but the consultant said it drove a “culture of limited collaboration and limited knowledge share” – as different teams saw each other as competitors. 

But while some suggest Deloitte’s coming ‘strategic shift’ could help deal with this – enabling Deloitte to reallocate investments from traditional service areas, in a way that could future-proof the business amid shifting market trends – others are less upbeat. The move could also destabilise the market, leading to more job losses and internal disquiet across the firm.

One current Deloitte employee told Financial News London that, “it would have been nice to learn about it directly rather than reading about it in the press”. As the firm looks to push ahead with further changes, this kind of uncertainty may cause more talent to weigh up its options elsewhere – which might see the firm lose expertise to its rivals.

Speaking to the same publication, Andrew Errington-Thomas, chief executive of Consulting Point, said that while “most of the 450,000 Deloitte people will still be there, doing a great job, earning a great salary and complaining about something else,” there is discontent among the ranks – and Consulting Point has “been hearing the thoughts from people who have been weighing up their options outside of Deloitte… There is much of an air of ‘let’s wait and see’ with the majority”.

Wider issues

One of the main things which may be keeping those employees hanging on, is that there are fewer places to jump ship to. According to a new report from Source Global Research, 2024 is set to be “a very difficult year” for professional services firms, with deal pipelines having dried up over the past year. Even as other reports squint to see ‘green shoots of revival’ in the M&A scene, however, many other clients look to have tightened their purse-strings amid continued economic uncertainty.

For over a decade, Source found that the majority of professional services firms’ clients thought they would spend more on consulting than the previous year. But in 2024, this looks to have changed drastically – with 56% now saying they will probably decrease their advisory spend.

Amid this, Deloitte’s Big Four rivals EY, KPMG and PwC are also beginning to cut jobs in response to the slowdown. One ex-EY partner told Financial News London that because the Big Four firms are “very astute and partner remuneration is directly related to profit,” they will be weighing up ways of pushing down those expenses – especially as “they always have an eye on potential challenges.”