Deloitte Plans a Massive Restructuring

Restructuring a company with 455,000 employees worldwide is a head-spinning task. Thankfully, these are accountants we’re talking about. 

Deloitte, the biggest of the world’s Big Four accounting firms, is undergoing a massive organizational restructuring, the Financial Times reported on Monday. The group, presumably, did some good note-taking during rival Ernst & Young’s failed restructure-and-split-off last year.

Account to Four

What those versed in corporate-speak call reorganizations is what the rest of us simply call “cost-cutting.” And at Deloitte, the motivation behind the restructuring is no different. Not that it seems completely necessary either: In 2023, it reported revenue of $65 billion, a 15% jump from 2022. However, that was a slower growth rate than the 22% top-line spike from 2021. 

Translation: Deloitte is at the tail end of a massive growth spurt that saw it firmly cement itself as the industry’s biggest player. And with likely headwinds in the year to come, the company is looking to simplify: 

• According to an internal email seen by the FT, the new-look Deloitte will center around four business units, down from five previously: audit and assurance; tax and legal; strategy, risk and transactions, which will house its M&A business; and technology and transformation. 
• The changes will save costs, but how much has yet to be calculated, according to a source who spoke with the FT. In the email to staff, Global CEO Joe Ucuzoglu, who is leading the reorg, said the moves are intended to allow partners to spend more time with clients and less time managing internal staff.

The Ernst, The Young & The Restless: Change is hard for anyone, and the planned restructuring is apparently “a fairly divisive topic internally,” one former partner told the FT. Still, Ucuzoglu is deliberately choosing not to repeat the mistakes of EY’s blundered restructuring, when plans to split its audit and consulting firms into two separate businesses fell apart as leaders couldn’t agree on how to split up the tax business. ​“While some others in the market are looking to break this function apart, we believe that our fully integrated suite of tax and legal capabilities is a significant source of strength and differentiation and aligns with the needs of our clients,” Ucuzoglu wrote in his email to partners. In the world of the Big Four, “stay together for the tax accountants” seems reason enough to avoid divorce.