Deloitte launches global restructure and merges advisory businesses

19 March 2024 3 min. read
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A long-term global restructuring operation will see professional services firm Deloitte reduce its primary business divisions down to four, in part with the aim of addressing a ‘duplication of services’.

Deloitte – the biggest of the Big Four with $65 billion in global revenues – is set to embark on what has been described as the firm’s biggest operational overhaul in a decade, with the year-long restructuring exercise to condense its five current major divisions into four across its 150-country network.

While the firm said the move was aimed at “reducing complexity”, local chief Adam Powick has acknowledged it will result in the stripping out of duplicated roles.

Consultants launches global restructure and merges advisory businesses

According to reports, the main impact will be to Deloitte’s diverse advisory business, which has fueled its stratospheric revenue rise over recent years. While the firm’s traditional audit & assurance arm will remain largely as is, along with its tax & legal division, Deloitte’s three other primary operating units – consulting, financial advisory, and risk advisory – will be squished into two; bracketed as “strategy, risk & transactions” and “technology & transformation”.

Accordingly, Deloitte’s M&A business, which is currently experiencing a downturn in line with a decline in global deal-making, will sit within the first division alongside risk advisory, while the firm will bring its AI, data & analytics, digital engineering, and cyber offerings together under the technology transformation banner.

Meanwhile, Deloitte’s ESG work will supposedly shift to an expanded audit & assurance unit in an effort to tackle silos.

“Our new global storefront is the culmination of a substantive body of global work over the past 12 months,” Powick told the Australian media. “The work has been guided by the principles of how we best organise our services to better align with priority client needs, simplify our offering model to make it easier to team and provide multidisciplinary solutions for our clients. It will also address duplication in services which have arisen over time.”

Although Deloitte has so far declined to comment on whether the reorganisation will involve the loss of jobs, its operational restructuring can effectively be read as shorthand for that likely outcome, with support functions required for only four units rather than five. McKinsey & Company last year also rejigged its operations for “the first time in more than a decade”, with the management consultancy’s back office staff copping the brunt of the 1,400 consequent layoffs.

Locally, PwC just last week announced 366 further staff and partner cuts following a restructure of its Australian business, which reportedly targeted overlaps in its support functions with a focus on consulting, while Grant Thornton quietly followed suit by axing a dozen or so management consultants. KPMG has also shuffled its local business lines within the past twelve months, but expanded its consulting practice to include risk advisory as one of five units.

While the global overhaul isn’t expected to be complete until some time toward the middle of next year, Deloitte Australia and its merged Asia Pacific geography will have the changes in place from the beginning of the next financial year in June. Deloitte has operated under its current model since 2014, a period covering the consulting boom times, but the economic headwinds and other market factors impacting the sector don’t appear to be improving.