Deloitte UK Cuts Consulting Bonuses 20% Amid Underperformance

Deloitte UK has announced that it will reduce the annual bonuses for employees in its consulting division due to underperforming financial results. The decision was communicated to employees through an internal email sent by Richard Houston, the senior partner and CEO of Deloitte UK. Houston revealed that employees in the Technology & Transformation (T&T) consulting division would receive an average of only 80% of their expected annual bonuses. This reduction is a direct result of the division's failure to meet its performance targets for the year.

Houston's memo also highlighted that the partners within the T&T division would also face a reduction in their annual bonuses. He described the year as "particularly challenging" for the division, noting that it had "significantly underperformed" against its set goals. The financial performance of the T&T division has been a significant factor in Deloitte's overall financial outlook for the year. Houston mentioned that while the overall profit for the 2025 fiscal year, which ends on May 31, would be "slightly higher than last year," it would still fall short of the company's initial projections.

In addition to the bonus reductions, Deloitte UK has also announced that the number of employee promotions for the year would be lower than in previous years. The company plans to promote 5,500 employees in the next fiscal year, which represents approximately 25% of its total UK workforce. This is a decrease from the 28% promotion rate seen in the previous year. Houston's announcement has been met with disappointment among employees, particularly those in the T&T division. One consultant from the division described the news as a "morale killer," stating that it had a negative impact on the team's overall atmosphere. The consultant further noted that the division had been "severely impacted" by the financial setbacks.

The decision to reduce bonuses and promotions reflects the broader challenges faced by Deloitte and the consulting industry as a whole. The underperformance of the T&T division is a clear indication of the difficulties in meeting client expectations and adapting to the rapidly changing technological landscape. The company's efforts to streamline operations and improve financial performance will be closely watched in the coming months as it seeks to regain its footing in a competitive market.