-
Staff in one of Deloitte’s four UK divisions will get lower bonuses after missing profit targets.
-
The firm will also promote fewer staff this year, according to an internal email seen by BI.
-
The promotions move was demotivating and has “dampened” the office mood, a Deloitte employee said.
Deloitte told employees in one of its UK consulting divisions to expect lower annual bonuses following weaker-than-expected financial performance.
Richard Houston, a senior partner and chief executive of Deloitte UK, wrote in a companywide email on Tuesday that employees in the technology and transformation (T&T) consulting division would receive an average of 80% of their annual bonus.
Partners in the division will also face a drop in annual rewards, Houston said in the memo seen by Business Insider.
The memo was first reported by The Financial Times.
The T&T business had “faced a particularly challenging year and fell materially short of its performance goals,” Houston wrote.
Bonuses have always been linked to individual and firm performance. However, for the 2025 financial year, they will also take into account performance variations in each of Deloitte’s four business lines.
The shift means that workers in Deloitte’s other three business lines — which cover deals, tax and legal, and audit and assurance services — will retain their full bonus.
Those three divisions have either exceeded targets or, in the case of the audit and assurance branch, had still increased profits in the 2025 financial year, Houston wrote.
Deloitte will also promote fewer employees than in previous years, Houston said.
The firm would promote 5,500 employees, or about 25% of the UK workforce, at the start of the next financial year, he said. In the previous year, 28% were promoted, Houston said.
A Deloitte consultant in the T&T division said the news about promotions was demotivating and had “dampened” the mood. They added that their division had taken “a beating.”
It’s “not the best feeling since T&T functions have historically pulled the firm forward in times of crisis,” the employee added.
Deloitte UK’s total profits for its 2025 financial year, which ends on May 31, would be “slightly ahead of last year” but “below our original plan,” Houston wrote.
“At the start of FY25, we expected greater economic stability and a gradual return of growth opportunities. But an early election, geopolitical complexity, and unexpected economic headwinds — like changes in trade policies — have continued to cause market uncertainty,” he said.
Deloitte’s global revenue climbed 3.1% to $67.2 billion in the 2024 financial year, which marked a sharp slowdown in growth compared to the 14.9% increase in 2023.
The firm’s UK arm has reorganized its business divisions and laid off workers as it grappled with an industrywide slowdown in demand for consulting services that has hit revenue growth.
Cost-cutting
In October 2024, Deloitte UK cut its spending on staff travel and expenses by more than 50%.
Houston addressed the cost-cutting measures in Tuesday’s email, acknowledging “it has not been easy” for teams to be unable to meet in person for much of the year.
He said the efforts to manage costs had “made a significant difference” and had directly contributed to bonuses for the 2025 financial year.
A Deloitte UK spokesperson told BI: “Amid ongoing market uncertainty, we are pleased to be able to recognize 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.”
Have a tip? Contact this reporter via email at pthompson@businessinsider.com or Signal at Polly_Thompson.89. Use a personal email address and a nonwork device; here’s our guide to sharing information securely.
Read the original article on Business Insider
