Coronavirus: Deloitte Australia cuts employee pay 20pc

Deloitte will cut employee and partner salaries by at least 20 per cent as it battles to respond to COVID-19.

Deloitte Australia CEO Richard Deutsch. Picture: Supplied

Professional services firm Deloitte will cut employee salaries by 20 per cent and its partners will see their pay reduced by about a quarter or more as the firm battles to respond to the COVID-19 social and economic shutdown taking place around Australia.

The firm’s partners will take a minimum 20-25 per cent reduction in their earnings for at least 12 months, and any pay increases or promotions across Deloitte will be deferred until 2021, as part of a raft of changes announced on Wednesday afternoon.

Meanwhile, Deloitte staff will receive 20 per cent less in their monthly pay until the end of September, representing an 8 per cent drop on an annualised basis.

The firm said any employee hit by the move would receive an additional 10 days of annual leave which can be taken up to the end of January next year.

“This global health crisis has now also become a global economic crisis to which Deloitte is not immune.”

Deloitte Australia chief executive Richard Deutsch said. “Over the last month we have seen many businesses across Australia having to restructure and reduce their workforces due to mandated business closures based on the advice of health experts and government, trade and travel restrictions and changing consumer behaviours.

“Our own Deloitte Access Economics team estimate that over 1 million jobs have been lost in the last 3 weeks. In this environment, a significant focus for my leadership team and me is to minimise job losses across our business. We also remain focused on providing our clients with quality service in these difficult times and deeply understand the important role we play in the capital markets.”

The Deloitte move is the latest across the big four accounting and professional services firms across Australia.

Mr Deutsch said the move would not apply to staff earning less than $65,000 annually, and any employees earning above that figure will not have their salary reduced to below $65,000.

PwC is putting most of its 8000 staff on a four day week from May 1 and also plans to cut its partner income by as much as 40 per cent next financial year. Income draws for its 700 partners have been reduced by 20 per cent from March 1 already, and they have been warned their incomes could be cut by 30 per cent to 40 per cent in the 2021 financial year, with no bonuses.

Competitors Ernst & Young has asked its partners and staff to drop their hours and pay by at least 20 per cent, while PwC has reduced the hours and pay of most of its staff by a similar amount.

KPMG has laid off 200 staff and is cutting the salary of salaried staff and partners earning more than $62,000 annually by 20 per cent over four months from May onwards. The firm’s equity partners have also had a short-term 36 per cent cut in their salaries and are foregoing a partner distribution due mid-April.