Deloitte Scales Back Bonuses, Pay and Promotions Amid Market Uncertainty
Deloitte, one of the UK’s leading accountancy firms, has announced that it will be reducing bonuses, pay rises, and promotions for its 27,000 UK staff this year. The decision comes as the firm faces a challenging market, with profits for the current financial year expected to be “below our original plan”, according to Richard Houston, Deloitte’s UK senior partner.
In an email sent to staff, Houston cited the firm’s consulting business as having “faced a particularly challenging year and fell materially short of its performance goals”. The audit practice also performed worse than management had hoped for. As a result, employees in Deloitte’s consulting division will not receive their full bonus this year, with most seeing a reduction of about 20 per cent. Partners, who were paid an average of just over £1 million last year, will also be affected.
The news was first reported by the Financial Times, and according to The Times, Houston wrote that Deloitte’s consulting business had struggled due to higher interest rates and rising geopolitical and economic uncertainty. “At the start of FY25, we expected greater economic stability and a gradual return of growth opportunities,” Houston wrote. “But an early election, geopolitical complexity and unexpected economic headwinds — like changes in trade policies — have continued to cause market uncertainty.”
The firm’s UK tax and legal practice and its deals teams performed better than expected and are likely to receive their full bonuses. Deloitte has made adjustments to its bonus structure for 2025 to “reflect the variations in performance” within the business. The changes mean that an employee’s bonus will now be linked to the performance of the part of the business they work in, as well as their individual performance and that of the wider company.
UK employees will receive a 2.9 per cent salary increase this year, compared with the 5 per cent they received in 2024. This reflects the “need for caution given the current market outlook”, according to Houston. Deloitte also expects to promote around 5,500 employees this year, 1,300 fewer than last year.
A spokeswoman for Deloitte said: “Amid ongoing market uncertainty, we are pleased to be able to recognise our people for their hard work with salary increases, bonuses and promotions this year. This is alongside other benefits such as fully funded private medical insurance, recently enhanced family policies, and our commitment to offering flexibility and choice in our ways of working.” The changes are part of a wider trend among big consulting firms, which have struggled in recent years due to market uncertainty and have responded by cutting jobs and reducing graduate intakes.
The accountancy sector has faced significant challenges in recent years, with many firms struggling to adapt to changing market conditions. As The Times reports, Deloitte’s announcement is a clear indication of the difficulties faced by the sector. The firm’s decision to scale back bonuses, pay and promotions is a pragmatic response to the current market uncertainty, but it remains to be seen how the firm will perform in the coming year.
Deloitte is not alone in facing these challenges, with many of its rivals also struggling to adapt to the changing market. As the sector continues to evolve, it is clear that firms will need to be agile and responsive to changing market conditions in order to remain competitive. With its latest announcement, Deloitte has demonstrated its commitment to navigating these challenges and ensuring its long-term success.
Source: The Times
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