Deloitte CEO lauds its Big 4 dominance as firm axes thousands

22 June 2020 5 min. read
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Deloitte Global CEO Punit Renjen has planted his foot firmly in his mouth, lauding his firm’s “undisputed” financial dominance. The comments come at a delicate time – more than 10,000 people have been axed across its international operations, surely leaving a bitter taste in the mouths of many now-former employees.

The consulting industry stands to take a sizeable hit from the Covid-19 crisis, and according to the latest estimates, it will be worth around 18% less at end of 2020 as a result. The drop of $28 billion currently forecast could prove catastrophic to even the largest players in the industry – though it might be hard to tell from the victorious tone of Deloitte’s Global CEO when discussing his firm’s anticipated results for 2020.

In a buoyant company-wide email circulated across Deloitte’s international operations, Punit Renjen was in nothing short of a celebratory mood, stating that despite the current Covid-19 crisis, Deloitte will end the year in a strong position.

Apparently, Deloitte has forecast a global aggregate revenue of $48 billion, with a growth of 6% – securing its status as the largest of the world’s four biggest professional services firms by revenues. Deloitte has been the world’s largest professional services firm since 2016, when it overtook arch rival PwC after a strong campaign of organic growth and bolt-on acquisitions.

Deloitte CEO Punit Renjen

The firm credits its top position for a large part to its consulting division, which is the largest in the world in size. Deloitte had a head start on its Big Four rivals as the firm didn’t sell off the unit back in 2002 following the Enron scandal, while PwC (sold to IBM), EY (sold to Capgemini) and KPMG (spun off as BearingPoint / sold to Atos) divested their consulting divisions.

Renjen told Deloitte’s staff that Deloitte’s latest annual performance played into the firm’s ultimate “aspiration” of “undisputed leadership” – before adding that while “a pandemic impacts that journey – the story of FY20 being a tale of two halves – but it does not change the trajectory.”

The braggadocious tone of his first email was added to later, when Renjen took to Twitter to further commend Deloitte’s performance amid the lock-down. “Deloitte has a long history of helping our people, clients and communities thrive through wars, recessions and pandemics. Resilience is a part of our DNA as we continue to make an impact in the age of Covid-19.”

The statements will provide more than a few raised eye-brows across the consulting and audit firm’s staff, thousands of whom have just been handed their marching orders as Deloitte tightens its belt across its global footprint. On record, the number of people fired by Deloitte is now around 7,500 – including 5,000 professionals in the US, 1,500 in India, 700 in Australia and 200 in Canada.

These workers will be left questioning just why they have been axed if the firm is enjoying such a great year, and wondering how exactly they are being “supported” through this particular pandemic. Meanwhile, over the past years, the firm’s partners (shareholders) in Western member firms have easily raked in $500,000 or above per year in profit, meaning that they sit on huge buffers.

However, the real number of former staff left fuming at their CEO’s arguably tone-deaf statements may actually be even higher. While the company has confirmed the 7,500 layoffs, based on tips received from sources close to the story globally, estimates that the number of jobs lost is actually closer to 10,000.

Worse still, in the long-term, the full scale of the layoffs is likely to stretch even further, as Deloitte’s strong financial position had seen it defer the hit it would take from Covid-19. Similar to PwC and EY, Deloitte’s financial year runs from June to June, and in the first three quarters of its current financial year it was business as usual, gaining close to double digit growth globally. In the fourth quarter though, as the pandemic hit, that plummeted.

As Deloitte enters the first quarter of its new year, country organizations are working on plans to quickly recalibrate their workforces, with several larger members firms in Asia and Europe set to announce measures in the coming weeks.