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Deloitte reported its weakest revenue growth since 2010 last year, as demand for its consulting services fell sharply in the Americas and Asia amid tougher economic conditions.
Figures posted on the company’s website this week showed the company’s global revenue rose just 3.1 percent to $67.2 billion in the year to May 31, its worst performance in 14 years.
This weak performance was due to a significant decline in the company’s consulting division, its largest business line, accounting for more than 40 percent of revenue and a significant growth driver in previous years.
The company reported sales growth of 1.9 percent in local currency terms for the year, compared with growth of 19.1 percent in the previous 12 months and 24.4 percent in the year to May 2022.
Deloitte is the first of the Big Four to release its global financial performance report for fiscal year 2024.
Partners at its main competitors — EY, KPMG and PwC Company — have hinted separately that they also expect to report a slowdown in growth as a tough economic backdrop in key markets forces companies to cut spending.
Revenue growth was strongest in Europe, the Middle East and Africa, at 8.5%, Deloitte said.
In the Americas, the largest of the three regions, growth slowed to 1.4 percent, down from 17.5 percent in the previous fiscal year. Deloitte did not provide a growth rate for the Asia-Pacific region, which other figures show was flat or falling.
The four major companies all suffered sharp declines in China, a previously strong growth market, as the country’s economy is reeling from a downturn in the property market.
Partners say Australia is also vulnerable as the fallout from the PwC tax secrecy scandal has brought increased scrutiny to consulting firms here.
“Amid a complex global environment over the past year, Deloitte has successfully maintained its growth trajectory while investing heavily in next-generation capabilities aligned with emerging areas of client demand,” said Joe Ucuzoglu, global chief executive officer of Deloitte.
Tax & Legal was the firm’s fastest growing business, growing 8.7 percent in local currency, still down from the previous year. Revenue growth in audit and assurance slowed to 4.1 percent, while financial advisory saw revenue decline nearly 4 percent in local currency, as mergers and acquisitions remained low.
Big Four firms are in the process of overhaul its global operations to cut costs and reduce organizational complexity.
Under the plan, the company’s core business units will be cut to four – audit and assurance; strategy, risk and transactions; technology and transformation; tax and legal – from the five it has had since 2014.
Deloitte’s global workforce remains unchanged at 460,000.
