Deloitte is preparing the largest reorganization of its operations in a decade, with which the firm seeks to cut costs and reduce the complexity of the organization in the face of the foreseeable market slowdown, according to the Financial Times newspaper.
The plan implies that Deloitte will reduce the group's main units to four – audit and insurance; strategy, risk and operations; technology and transformation; and fiscal and legal – from the five it has had since 2014.
The reorganization will reduce costs across the company, a source involved in the project told the FT, but a concrete savings figure has not yet been set. Joe Ucuzoglu, global CEO of Deloitte, is leading the reorganization, which will take a year to be implemented in the more than 150 countries in which the firm operates. Deloitte studied the possibility of splitting its auditing and consulting businesses two years ago, although it ultimately ruled out that possibility. Its rival, EY, spent more than a year trying to carry out a spin-off but abandoned the attempt.
In an email sent to Deloitte partners on Monday, Ucuzoglu said the plan seeks to reduce the “complexity” of the company and would “free up” resources to work with clients. Deloitte employs approximately 455,000 people worldwide.
As part of the changes, Deloitte's advisory business, which serves businesses in everything from technology to trading, and also includes its tax and legal unit, will be reduced from four to three divisions. . Its audit and insurance unit will remain independent.
For their part, Deloitte's consulting, financial advisory and risk divisions will be grouped into two newly created business units: strategy, risk and transactions; and technology and transformation.
The first will offer Deloitte's mergers and acquisitions advisory services, operations that have suffered a drought in recent months. The technology and transformation unit will bring together its “digital transformation” services, including engineering, artificial intelligence and data, according to the email accessed by the Financial Times.
In order to promote transversality and eliminate silos, some employees will be transferred to an expanded audit and assurance branch, which will include those working in the environmental, social and governance areas.
The tax and legal area will continue to be an independent business within the new structure. EY's demerger plan failed because management could not agree on how to divide the tax practice between the two halves of the business. PwC, for its part, has divided taxation between its advisory and assurance activities in the United States.
In its last fiscal year, Deloitte's global revenue increased 15% to $65 billion, consolidating its position as the largest of the so-called Big Four. However, after several years of rapid growth, Deloitte, EY, PwC and KPMG are preparing for a tougher year, as the difficult economic context in major markets leads companies to cut expenses.
Unlike other multinationals, the big four are managed as a global network of companies linked through a global entity that sets the strategy. The global business is financed by the fees paid by local firms. This complex structure can make restructuring difficult as partners compete with each other to gain influence in the global network.
The new structure is expected to be in effect in June 2025, and local companies will begin applying it as early as June,
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