[Updated on June 12 with some additional information.]
We’ve got some new info to share today, at least from the Deloitte & Touche side of things. A tipster told us the following things were said by D&T CEO Lara Abrash this morning during a call with her audit and assurance peeps:
She confirmed what we had long expected: No merit raises, reduced AIP (i.e., bonus pool), reduced promotion raises. Partners taking ~20% pay cut over the next two years. No furloughs, no pay cuts for professionals. Projecting single-digit decline in revenue from the next year (thru May 2021). New hires all still starting, although staggered start dates. 2nd years will see a small raise for “compression” which just means they won’t be making less than any new hires. Layoffs are allegedly done at this point, i expect their plan is to see some voluntary separations as a result of the compensation announcements today, but that’s just my guess.
We had heard from some people that the firm’s audit practice took the smallest hit in terms of layoffs at 3%, while other practices and non-client-facing areas were losing 5% or more of their staffs.
And is anyone else besides me interested in the loss of revenues Deloitte U.S. is projecting for FY 2021? While only single-digit, D&T is still expecting a decrease, Deloitte Advisory is projecting a double-digit revenue loss (see below), and I wouldn’t be surprised in the least if Deloitte Consulting took a HUGE hit. Has Dan Helfrich said anything about FY 2021 revenue projections for DC? I have no idea whether or not Deloitte Tax will see any type of revenue increase.
Also, has Deloitte Tax, Deloitte Consulting, and Deloitte Advisory provided an update to employees on comp/raises/bonuses yet? If so, let us know by text or email using the contact info at the very bottom of this article.
[Updated on June 3 with some layoff horror stories.]
June 1 was New Year’s Day in D-town, and there’s a lot of people all across Deloitte in the U.S. who are on edge this week after practice leaders told their staffs on May 29 that a bunch of people will be getting pink slips in the very, very near future.
We were told by several sources on Friday that Deloitte will be eliminating 5% of its U.S. employees, across all service lines and businesses. We were also told that advisory and consulting will likely take a bigger hit than tax and audit. So the run of bad news for Deloitte Consulting continues.
If I’m doing my maths correctly, that’s more than 5,000 Deloitters who will no longer have jobs in the coming weeks.
involuntary separations headcount reductions layoffs have begun, as some Green Dotters who have been singled out for the chopping block have already been told their fates by their bosses along with HR.
Here are some of the horror stories we’ve seen so far. One person who said they worked at Deloitte for 22 months as a consultant posted this on Reddit yesterday:
So. I was just let go. Happens.
Effective immediately. Tomorrow is my last day. They’ll send a box for my computer and what not.
I can keep my phone (-$25 disabling fee).
What you really care about. 5wks separation. 5wks benefits. PTO is paid out. One time lump sum for additional benefits. If I get employed while on the 5wks sep, I get the remainder as a lump sum. I’m eligible for UI.
When this person was asked if they received a payout from their pension plan, they said:
No payout necessary. We have a corporate 401k we can buy into. I retain my shares. I just can’t buy any more at their rate.
Another person posted this on Wednesday afternoon:
Advisory Cyber Risk – just laid off. 11 months at Deloitte, Util was great, had one average rating on scatterplot, but all others were great.
Benefits: 4 week pay continuation, 5k lump sum, full PTO payout, and the juiciest: keep the phone.
This person added that “the only bench time I had over the course of a 12-month period was one week” and “I have ~4 years of cybersecurity experience including a previous consulting firm and Deloitte. I assume I was pretty pricey for a senior consultant and that could have weighed into the factor as well.”
A person who was on the hospitality side of the Risk and Financial Advisory practice posted this today:
Had my call this morning. Officially laid off/separated. Was told it had nothing to do with performance issue or personnel stuff, just simply due to economic struggles at the moment. Got 7 weeks paid, PTO payout, and a decent lump sum up front (won’t disclose the exact amount, but in the thousands). Also got to keep my benefits for two months. Have the option of keeping my Deloitte phone but not worth the hassle for me, nor do I need the phone. My last “official” day is tomorrow, so I have two days to square away my DTE, Dnet, TOD, personal files, etc. If I find another job before my 7 weeks is up they’ll pay me a lump sum of what’s left and release me officially.
Sounds like most of my team was released based on the litany of texts and emails. We had a round of layoffs a month or so ago that I was led to believe was supposed to prevent further layoffs but here we are. No ill will towards Deloitte. Hope that someday my path brings me back here as I have almost nothing but good things to say about how I was treated throughout my career there. Going to take a week or two to relax and lick my wounds and then get back out there. I know it’s going to be tough to find a job with the mass unemployment, low economy, and layoffs going around. But I’ll survive.
I guess the takeaway from these layoffs is that, unlike what we were told initially last week, it’s not just underperformers or those “on the bench” who are getting canned, it’s also those with high utilization, which has to be kinda scary for those of you working at PwC, EY, and KPMG right now.
Another person posted on Reddit:
Well it happened. Had a call with PPMD and HR person. Was very brief and not very personal. Was told that my last day would be tomorrow (today) and they will ship me a box to send back my laptop, badge, etc.
Expected a lot more from Deloitte as a firm on how they managed this process. Senior consultant, top right scatterplot and 85% utilization.
And another person who was laid off posted this on Fishbowl today:
I was definitely not on the bench. Extremely utilized. However, my summer schedule was light, but not empty. Around 20 hours per week.
Besides layoffs, we were told last week that an additional 1.5% of Deloitte employees will either be furloughed or have their work hours reduced with reduced pay. Those employees will be notified next week, according to sources.
According to the technology website CRN, Deloitte spokesperson Jonathan Gandal said the
involuntary separations headcount reductions layoffs are “in connection with our annual fiscal year-end financial planning and performance management processes” and that the firm is “aligning our resources with our clients’ evolving needs.”
Gandal added that demand for Deloitte’s 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 source told us that Deloitte Tax Chairman and CEO Steve Kimble said during the all-tax-hands-call on Friday that, “Though lower than our projections, Tax has had record growth once again this year thanks to your hard work. We have new proposals in the pipeline and expect good growth next year as well.”
Our source added:
After that they announced layoffs leaving many professionals upset and confused.
I have no doubt that when Deloitte’s FY 2020 global revenue numbers are released in September, they’ll still be strong because the firm most likely had a strong first three quarters before the coronavirus pandemic upended all things Deloitte during Q4. But despite Kimble’s rosy outlook for FY 2021 at Deloitte Tax in the U.S., I think it’s very possible Deloitte, as well as the other Big 4 firms, could see global (and possibly U.S.) revenues stay relatively flat or—gasp!—see a slight decrease in FY 2021 due to the crisis.
Here’s a tip we got on Friday about Deloitte Advisory in the U.S.:
Projecting 16% Advisory revenue decrease in FY21, expect “severe and prolonged” impact lingering through FY22.
We also got a screenshot sent to us on Friday afternoon with notes that were taken of what was said during one of the all-hands calls on Friday morning. Here’s the notes we were sent:
- Roughly 5% across-the-board Deloitte US headcount reduction, effective early June. This is average; some practices will be hit much harder than others based on market projections.
- Affecting up to level of Partner (presumably they will be allowed to retire comfortably?).
- Separation conversations begin next week w/Talent for Deloitte US (later in June and into July for USI?).
- People who are let go will have a combination of salary and benefit continuation (what % not indicated), some additional amount in a separation package, 100% payment for remaining PTO, help with unemployment insurance claims process.
- Additional impact in form of reduced work schedules; impacted employees working ~80% of normal FT equivalent was mentioned, but potentially even greater reduction; executed as reduced work week and commensurate reduction in comp.
- Workload modification conversations start mid-June, in effect in mid-July for Deloitte US.
- Reduced workload employees won’t lose benefits (not said: whether employee’s share of benefit costs in % or raw $ contribution will go up).
And unfortunately this might not be the only round of layoffs we see at Deloitte during FY 2021. A person who listened to the all-hands call for Deloitte’s Enabling Areas function, which includes administrative and executive assistants, among others, told us this on Friday:
They mentioned they’ll continue monitoring the COVID impact and, if there is a second wave of illness, “separations” are a possibility again in the fall.
Happy 2021, Deloitte friends. We really hope no more blood is shed.
We’ll continue to update this article as we get more information about layoffs this week.