Deloitte Announces Plans to Reduce Workforce by 1.5%, 1200 Employees to be Fired

Deloitte, the global consulting and accounting firm, is reportedly laying lay off 1.5% of its workforce in the United States. The company, which has around 4,15,000 employees worldwide, is resorting to layoffs to streamline its operations and cut costs in response to the ongoing economic uncertainty. This latest development has been brought to light by the Financial Times citing an internal memo.

It is unclear at this time which departments or regions will be affected by the layoffs. As the pandemic continues to impact businesses worldwide, it remains to be seen if other firms will follow suit with similar announcements. The announcement comes as a surprise to many, as Deloitte has been regarded as one of the more stable consulting firms during the pandemic. 

This announcement also comes on the heels of similar news from other consulting and accounting firms, including EY and KPMG, who have also announced layoffs in recent months. Recently, Ernst and Young, one of the world’s largest professional services firms, announced that it would fire around 5 percent of its workforce in the US, which amounts to 3000 employees.

Why Are Deloitte and Other Companies Announcing Layoffs?

Companies have been providing a number of reasons for layoffs including reduction of costs and restructuring operations. Here are a few common reasons for companies choosing to lay off employees:

1. Economic conditions: Companies are struggling financially due to economic conditions such as a recession, which is why they need to reduce their workforce to cut costs and remain competitive.
2. Changing market conditions: Companies involved in lay offs have system that the market is changing or shrinking, which is why they have to restructure their operations to stay viable. This can involve reducing staff in departments that are no longer as important, or investing in new areas that require different skill sets.
3. Technological advancements: Companies investing in newer technologies tend to reduce their workforce as the technology can automate certain tasks and make certain roles redundant.
4. Hired too quickly: The pandemic gave rise to a certain to a temporary demand that led companies to hire exponentially for those roles. However, now as the demand shrinks, companies have been firing those employees that have been hired over the last two years.