Deloitte has initiated its largest restructuring of global operations in ten years. This move aims to cut costs and streamline the organisation in preparation for an expected market downturn.
According to a report by the Financial Times, as part of this restructuring initiative, Deloitte will reduce its main business units from five, which it has maintained since 2014, to four: audit and assurance; strategy, risk, and transactions; technology and transformation; and tax and legal, according to the report.
Although a specific figure for cost savings has not been disclosed, media reports revealed that the reorganisation will aim to reduce costs throughout the firm. The extent of potential job cuts remains uncertain.
Led by Deloitte’s global chief executive Joe Ucuzoglu, the restructuring initiative is projected to span a year and cover the firm’s operations in over 150 countries. In an email addressed to Deloitte’s partners on Monday, Ucuzoglu emphasised that the plan aims to streamline the firm’s “complexity” and enable more partners to engage directly with clients rather than focusing on internal staff management.
Deloitte currently employs approximately 455,000 individuals worldwide. In its previous fiscal year, Deloitte experienced a notable 15 per cent increase in global revenues, reaching $65 billion, thereby securing its position as the largest among the Big Four accounting firms.
Nevertheless, the company anticipates a challenging year ahead due to difficult economic conditions prevailing in key markets. According to a report featuring insights from the Big Four, the UK consulting market is forecasted to stagnate this year, marking the first time since 2020 that it fails to grow.
The decision to restructure the business comes after Ucuzoglu dismissed the possibility of separating its audit and consulting arms the previous year. However, EY had previously attempted to orchestrate a split of its firm, only to abandon the effort in April of the preceding year.
Under the restructuring plan, Deloitte’s advisory businesses, which encompass services ranging from technology consulting to dealmaking, including its tax and legal division, will be consolidated into three divisions from the current four. The audit and assurance arm will remain independent, as stated in the FT report.
According to the report, the new organisational structure is slated to be fully implemented by June 2025, with member firms expected to commence implementation as early as June, as communicated in the email to partners.
