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Deloitte’s UK business on Tuesday reported its first decline in annual revenue in 15 years, but partners’ payouts increased as the Big Four accounting firm implemented cost-cutting measures.
Deloitte recorded revenue of £5.68bn in the year to May 31, down 1 per cent compared with the previous 12 months. It was the first time revenue had contracted since 2010.
Average profit per equity partner rose 4 per cent to £1.05mn, as Deloitte said it had responded to economic headwinds by “operating more cost-effectively”.
It was the fifth consecutive year that partners’ payouts exceeded £1mn. None of the other Big Four firms in the UK — EY, KPMG and PwC — have reported average underlying profit per partner of £1mn or more.
The fall in Deloitte UK’s revenue was largely due to a weaker performance at its consulting business.
The firm said consulting revenue fell 10 per cent to £1.68bn as “clients held back investments in large-scale change programmes”.
The Big Four firms’ consulting arms are contending with a slump in demand for their work since the Covid pandemic, prompting them to cut staff.
Deloitte’s three other business lines all reported revenue growth. The tax and legal unit recorded an increase of 7 per cent, while the audit and deals practices both reported 3 per cent growth.
Richard Houston, Deloitte UK senior partner and chief executive, said his firm’s performance had been “robust” in a “complex market”.
“Geopolitics and continued economic headwinds meant that many organisations have been carefully managing their costs and delaying certain investments,” he added.
“In light of this, we have had to review and make changes to the shape of our firm, but we’ve remained resilient with notable client successes across our businesses.”
Deloitte embarked on a major reorganisation of its business units last year, cutting them from five to four, as well as implementing several rounds of staff cuts.
At £253mn, spending on salary increases and bonus payments in its latest financial year was £10mn less than in the previous 12 months.
Deloitte told its UK employees in a memo in May that it would promote fewer people and reduce average salary rises because the firm’s overall profits were “below our original plan”.
Deloitte UK’s results include those of the firm’s Switzerland business, where revenue fell 3 per cent to £796mn. Deloitte has about 800 equity partners across its UK and Swiss businesses.
