Deloitte’s UK Arm Announces Reduced Bonuses and Promotions Amid Disappointing Profits
In a move that reflects the current market uncertainty, Deloitte’s UK arm has announced that it will be promoting fewer people, reducing the average salary rise, and cutting bonuses for its consulting arm. The Big Four firm’s profits for the financial year were “below our original plan” though “slightly ahead of last year”, according to an email sent to employees by the firm’s senior UK partner, Richard Houston, which was seen by the Financial Times.
As reported by the Financial Times, employees in Deloitte’s consulting arm will not receive full bonuses, which will be reduced on average by 20 per cent, and partners’ pay levels will also be affected. The firm’s consulting business “faced a particularly challenging year and fell materially short of its performance goals”, Houston wrote in the memo. Meanwhile, its audit practice also performed below its profit plans.
The Financial Times has learned that Deloitte’s decision comes amid continuing struggles for the Big Four firms’ consulting arms, which continue to navigate a post-pandemic slump in demand for business. Firms have had to cut employees hired during a pandemic boom in consulting projects. According to the Financial Times, Deloitte’s global revenues in 2024 only increased by 3.1 per cent, its worst performance in 14 years, driven by a significant slowdown in the firm’s consulting division.
In the UK, Deloitte’s consulting business also contracted last year. To mitigate the slowdown, the firm had slashed its travel and expenses budget at the end of last year, which Houston recognised in the Tuesday memo “has not been easy”. Some teams have been “unable to be together in person for much of the year”, he said, but the cuts had directly helped the firm pay its bonuses this year.
The Financial Times reports that next year, Deloitte will increase UK employees’ salaries by 2.9 per cent, compared with the 5 per cent pay rise for the previous year, reflecting a “need for caution given the current market outlook”. UK Inflation rose by 3.4 per cent in the 12 months to March 2025, according to data from the Office for National Statistics.
As stated in the Financial Times, the firm will also promote around 5,500 employees compared with the 6,800 promotions last year, and above 7,000 the year before that. KPMG, the rival Big Four firm with the most recently published data, promoted 10 per cent more people than in the previous year, and increased its bonus pool by 20 per cent. Deloitte UK 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 Financial Times also reports that Deloitte’s bonus structure has shifted, Houston said, and will begin to include a performance element based on business line in addition to those based on firm-wide and individual performance. The change was “a deliberate shift from prior years to reflect the variations in performance across our businesses”. This move is a clear indication that the firm is taking steps to adapt to the changing market conditions.
In conclusion, Deloitte’s UK arm is taking a cautious approach to bonuses and promotions amid disappointing profits. The firm’s consulting arm has been particularly affected, and the firm is taking steps to mitigate the impact of the slowdown. As reported by the Financial Times, Deloitte’s decision reflects the current market uncertainty and the need for caution in the face of ongoing economic challenges.
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