Deloitte US will lay off 5%, or approximately 5,000 workers, of its 106,000-strong workforce. The cuts were announced at the company on Friday morning, and will affect positions up to the level of partner.
The layoffs will not be evenly split among business lines and practices, but instead will be tied to market projections. A source told website Going Concern that advisory and consulting will likely take a bigger hit in terms of layoffs than the tax and audit businesses.
A tipster told Going Concern that Deloitte is projecting a 16% decrease in revenue for its advisory business in fiscal year 2021.
Deloitte spokesman Jonathan Gandal told technology news site CRN that “in connection with our annual fiscal year-end financial planning and performance management processes, we are aligning our resources with our clients’ evolving needs.”
Gandal added that “demand for our services continues to be strong and we are doing all that we can to minimize the impact on our people in this unprecedented environment.”
Another tipster told Going Concern that, in addition to the 5% layoffs, an additional 1.5% of Deloitte employees will be furloughed or have their work hours reduced with reduced pay.
The economic impacts of the coronavirus pandemic have caused many clients to reassess their budgets for large consulting projects. Social distancing regulations have also prevented many consulting firms from performing on-site work.
Initial projections from Source Global Research in March estimate the North American consulting market will decline by 15% in 2020.
Deloitte Canada last month laid off 200 consultants and auditors in its Toronto headquarters, also as part of a business needs forecasting procedure for the new fiscal year. The cuts amounted to approximately 1.6% of the firm’s 12,000-person workforce.
Meanwhile, in Australia, 99% of KPMG’s employees accepted a 20% voluntary pay cut to help the Big Four weather the storm. The other trio of the Big Four have also announced a set of measures impacting their people.