Deloitte Initiates Biggest Restructuring Plan In 10 Years To Reduce Costs: Report

While the reorganisation is expected to yield cost reductions throughout the firm, specific savings figures have yet to be determined, as per the report citing sources

Deloitte has reportedly initiated its most significant restructuring of global operations in the past ten years to address anticipated market deceleration, aiming to curtail expenses and simplify organisational structures. According to the Financial Times (FT), as part of this strategy, Deloitte will streamline its primary business divisions into four categories: audit and assurance; strategy, risk, and transactions; technology and transformation; and tax and legal, which is down from the five divisions in place since 2014.

While the reorganisation is expected to yield cost reductions throughout the firm, specific savings figures have yet to be determined, as per the report citing sources.

According to the report, one former partner said, “This is not about the junior grades. The biggest effect will be felt at the partner level. Partners will be taken out of management positions.” Joe Ucuzoglu, Deloitte’s global chief executive, is leading the initiative, which is expected to span over a year and encompass the firm's operations in more than 150 countries.

In a communication addressed to Deloitte's partners on Monday, Ucuzoglu outlined that the plan aims to streamline the firm's operations, reducing complexity and allowing partners to focus more on client engagement rather than internal management responsibilities, claims the report. Deloitte currently boasts a workforce of approximately 455,000 employees worldwide.

As part of the restructuring efforts, Deloitte's advisory businesses, encompassing technology, deal advisory, tax, and legal services, will consolidate, reducing from four divisions to three. Meanwhile, its audit and assurance segment will retain its independent status, states the report.

Deloitte's consulting, financial advisory, and risk advisory divisions will merge into two newly established business units: strategy, risk, and transactions; and technology and transformation, claims the report.

The former will encompass Deloitte's mergers and acquisitions advisory services, addressing challenges in a sluggish dealmaking environment. On the other hand, the technology and transformation unit will amalgamate various digital transformation services, spanning engineering, artificial intelligence, data, and cyber, as detailed in an email sent to partners, states the report.

Despite achieving a remarkable 15 per cent increase in global revenues to $65 billion in the previous financial year, Deloitte, as well as its counterparts EY, PwC, and KPMG, anticipate a challenging year ahead. Economic uncertainties in key markets are prompting companies to curtail expenditures, potentially impacting the performance of these major firms.

Meanwhile, according to a recent report, the UK consulting market is projected to experience zero growth this year, marking the first time since 2020, as indicated by insights from the Big Four firms.