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‘We are not immune’: Deloitte mandates 20% pay cut

Business

Deloitte partners and staff will now face a minimum 20 per cent reduction in pay as the firm responds to the COVID-19 downturn.

Sponsored by Jotham Lian 10 minute read

Deloitte chief executive Richard Deutsch has now briefed the firm’s staff to expect a 20 per cent pay cut from 1 May to 30 September 2020, effectively an 8 per cent reduction on an annualised basis.

The pay cut will not affect staff earning less than $65,000 per annum, while all other employees will not see their salary reduced below the $65,000 mark.

All partners will also see a minimum reduction between 20 and 25 per cent in earnings for “at least a full year”.

To help soften the impact of the short-term measures, all Deloitte employees will receive up to an additional 10 days of leave that must be used before 31 January 2021.

“This global health crisis has now also become a global economic crisis to which Deloitte is not immune,” Mr Deutsch said.

“Our own Deloitte Access Economics team estimate that over 1 million jobs have been lost in the last three weeks. In this environment, a significant focus for my leadership team and me is to minimise job losses across our business. We also remain focused on providing our clients with quality service in these difficult times and deeply understand the important role we play in the capital markets.

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“The measures that I have announced today will be implemented from 1 May and will remain in place for the next five months in line with the Prime Minister, Treasurer and Chief Medical Officers’ current forecast for the duration of this crisis.”

Deloitte’s response comes after its fellow big four competitors made similar announcements over the previous weeks.

PwC led with a cut to both pay and working hours, with EY following closely with a similar measure.

KPMG, on the other hand, has mandated a pay cut without a corresponding reduction in working hours — a path that Deloitte will similarly take.

“To ensure we continue to serve our clients with distinction and meet our regulatory responsibilities, our working hours will remain unchanged,” Mr Deutsch said.

“We will also continue to respect the request of our Prime Minister to do all we can to ‘keep business going’.”

Jotham Lian

Jotham Lian

AUTHOR

Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at:  

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Comments (2)

  • avatar
    What Deloitte is doing is on the edge of legality. Deloitte contracts do not say anything about the ability of salary reductions. Employees must accept the proposal for the salary reduction to be applied. So Deloitte is trying to persuade them that the only acceptable reason for not accepting are special circumstances. A page was created to inform employees about the salary reduction discouraging them to decline the offer. You need to read through a ton of BS and if you still disagree, you can press the button to start a process of disapproval. Then you need to select a reason. If you choose financial problems, you cannot continue, because there's a page that will try to convince you that you don't. If you still disagree you can select special circumstances and somebody will call you trying to persuade you that your circumstances are not special enough. I.e. Deloitte is using all kinds of psychological tricks to push their employees into a corner to accept the proposal.
    0
  • avatar
    So continue "to serve our clients" so the revenue is generated but not be paid. How out of touch is this guy? If staff continue to work they should be continued to be paid. If that means Partner profits drop by 50% then so be it. This is greed to the extreme so that the Partners keep their Mosman & Bellevue Hill mansions and BMW's at the expense of staff who are already in a chew them up and spit them out environment. You can guarantee if Partner profits are maintained the staff won't be receiving bonuses.
    1

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