Deloitte aims to halve UK travel and spending

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Deloitte wants to cut spending on staff travel and expenses in the UK by more than 50 percent as it seeks to protect partner profits amid a slowdown in the professional services sector.

An email to partners and directors at the Big Four advisers, seen by the Financial Times, said the business was introducing “stronger cost management measures” due to “difficult market conditions” in the UK.

The email, sent in October, said the company was targeting to cut spending on travel and expenses by more than 50 percent by the end of the financial year in May. The outage was described as “limited” and “temporary”.

The price cuts are a sign of continued struggles for the UK’s consulting sector, which has been hit by sluggish demand since the pandemic hit as companies look for help implementing new technology. A long-term slowdown in merger and acquisition activity has also hit advisory work.

An email from Sarah Humphreys, chief tax and legal officer, said the company was considering further cost-cutting measures, including a review of “recruitment agency costs, licensing fees, bad debts and international fees”.

The tax and legal department had decided to cut travel and entertainment expenses.

Deloitte has made more than 1,000 jobs in the UK as of September 2023, employing around 25,000 people. The firm has been ramping up its workforce this fall, including about 250 consulting workers. reported Previously.

Richard Houston, senior partner and chief executive of Deloitte UK, warned this year that the company had to “carefully consider our cost base and make some difficult choices this year”.

Despite the market slowdown, Deloitte’s 749 UK equity partners They are paid. An average of over £1mn for the 12 months to May 2024.

It was the only Big Four firm to surpass the benchmark in its last financial year. It hit the target despite revenue at its consulting division, its largest service line, falling 1 percent in the 12 months to May 2024, and sales at its financial consulting practice falling 2 percent.

A UK financial services consultancy faces bleak forecasts. Research group Source Global said in October that while growth in the financial services advisory market will double to around 5 per cent worldwide by 2024, the market in the UK will shrink by 2 per cent.

Deloitte has reorganized its UK operations this year to bring it in line with planned global changes to cut costs and reduce the complexity of the organisation. Its main business units are narrowed down to four – Audit and Assurance; Strategy, Risk and Transactions; Technology and Transformation; and tax and legal – the organization from the previous five.

Deloitte said: “Like many organisations, we are carefully watching our costs to ensure we can meet the needs of our clients as we continue to invest in our company and our people.He said.