Deloitte cuts 700 Australian jobs

Professional services firm Deloitte has laid off seven per cent of its 10,000-strong Australian workforce.

Deloitte CEO Richard Deutsch says the company has tried to protect jobs and remain sustainable as a business. Picture:Jane Dempster

Professional services firm Deloitte has laid off 7 per cent of its 10,000-strong Australian workforce as it looks to protect the business amid plummeting revenue due to the COVID-19 crisis.

Deloitte partners learned of their fate at 12pm on Monday, while the rest of its staff were told at 2pm.

A Deloitte spokesman told The Australian about 700 job cuts had been made across most business units and internal client service departments, but that there were currently no staff reductions in its external audit practice, as the department was coming into “a busy period” at year-end.

While most business units lost 7 per cent of their headcount, the consulting and advisory parts of the business were even harder hit. Deloitte would not provide further details, confirming only that job losses exceeded 7 per cent in those divisions. None of the redundancies were voluntary.

News of the cuts came after Deloitte earlier this year cut all discretionary spending and in April asked staff to take a 20 per cent pay cut for five months from May as it scrambled to avoid job cuts through the economic shutdown.

The firm’s decision to slash hundreds of jobs came despite revenue for the financial year rising 10 per cent. The revenue jump was heavily weighted to the first half of the year, before COVID-19 hit. In the fourth quarter it suffered a “significant decline” in its revenue base, including a year-on-year drop of 19 per cent in May.

Commenting on the job cuts, Deloitte Australia CEO Richard Deutsch said the firm was trying to protect the long-term sustainability of the business as he detailed the recent revenue hit.

“From the beginning of the COVID-19 crisis two of our important principles have been to preserve as many jobs as possible while also protecting the long-term sustainability of the firm.

“Unfortunately, the last quarter of our 2020 financial year has seen a substantial drop in revenue and operating profit. We expect this trend to extend into at least the first quarter of our new financial year.

“Today, I have announced a second round of measures that includes a reduction in our workforce, actions that would not have occurred had it not been for the impact of COVID-19. The health, safety and wellbeing of our people are central to our purpose and values as a firm, so this has not been an easy day.”

The job cuts came on the same day the professional services firm took final bids for embattled airline Virgin Australia. Deloitte is acting as Virgin’s voluntary administrator.

Deloitte’s Vaughan Strawbridge received final binding bids from Bain Capital and Cyrus Capital Partners on Monday and is due to make a decision by June 30.

Deloitte follows peers KPMG and PwC in slashing jobs as the COVID-19 crisis smashes professional services firms. PwC last week announced it had made 400 staff in the financial advisory, consulting and support sectors of the business redundant. The cuts were equivalent to about 5 per cent of the firm’s Australian workforce.

KPMG let 200 staff go in March as part of its cost-cutting measures.