Deloitte to cut bonuses and slow promotions due to missed targets

Deloitte UK will reduce bonuses and slow promotions across parts of the firm after its technology and transformation (T&T) consulting division missed financial performance targets, according to an internal memo seen by Business Insider.

In the message, Richard Houston, senior partner and UK chief executive, told staff that average bonuses for the T&T division would be cut to 80% of the standard annual amount.

Partners in the division would also see a reduction in rewards.

Houston wrote that the T&T business had “faced a particularly challenging year and fell materially short of its performance goals.”

The decision marks a shift in how bonuses are allocated, with payouts now weighted not only to individual performance but also to the financial performance of each of Deloitte’s four UK business units.

Staff in the other three divisions — covering deals, tax and legal, and audit and assurance — will continue to receive full bonuses.

According to the memo, these areas either exceeded expectations or, in the case of audit and assurance, still reported profit growth.

Promotions Pullback Dampens Morale

Houston also confirmed that Deloitte would promote around 5,500 UK employees, roughly 25% of its workforce, down from 28% the year prior.

One consultant from the T&T division told Business Insider that the cuts had “dampened” morale internally and said their unit had “taken a beating.”

“It’s not the best feeling since T&T functions have historically pulled the firm forward in times of crisis,” they added.

Despite the T&T division’s underperformance, Deloitte’s total UK profits for the 2025 financial year are expected to come in “slightly ahead of last year,” though “below our original plan,” Houston wrote.

“At the start of FY25, we expected greater economic stability and a gradual return of growth opportunities. But an early election, geopolitical complexity, and unexpected economic headwinds — like changes in trade policies — have continued to cause market uncertainty,” he said.

Deloitte’s global revenue for the 2024 financial year rose by just 3.1% to $67.2 billion — a sharp slowdown from the 14.9% growth recorded in 2023.

Cost Controls Feed into Bonus Pool

In response to slower demand for consulting services, Deloitte UK has been restructuring its divisions and cutting back on costs. Last October, the firm halved spending on travel and expenses.

Houston said these cost-saving efforts “made a significant difference” and had “directly contributed to bonuses for the 2025 financial year.”

A Deloitte UK spokesperson added: “Amid ongoing market uncertainty, we are pleased to be able to recognize our people for their hard work with salary increases, bonuses, and promotions this year. This is alongside other benefits such as fully funded private medical insurance, recently enhanced family policies, and our commitment to offering flexibility and choice in our ways of working.”