Deloitte to Lay Off Employees Amid Federal Crackdown on Consulting Contracts

Deloitte recently announced plans for layoffs within its government and public services practice in response to a federal crackdown on consulting contracts. Since January, the firm has experienced 127 federal contracts being cut or modified as part of cost-saving measures implemented by the government.

Announcement of Layoffs

During an all-hands call on Thursday, Deloitte informed employees about the impending layoffs. The company's leaders expressed concerns about potential losses in the coming year due to the significant reduction in federal contracts. The layoffs are expected to affect a small percentage of employees within the government and public services practice.

Details of the Layoffs

According to sources familiar with the matter, Deloitte's CEO of Consulting, Jason Salzetti, revealed that the cuts would be completed by the end of April. The firm is taking proactive measures to align its workforce with the evolving needs of government clients and address the impact of reduced contract engagements.

Response from Deloitte

In a statement to Business Insider, Jonathan Gandal from Deloitte's reputation division confirmed the layoffs, attributing them to adjustments in response to changing market dynamics and client requirements. The exact number of employees affected by the layoffs remains undisclosed.

Impact of Government Scrutiny

Deloitte's challenges stem from increased scrutiny by government agencies, particularly the General Services Administration (GSA), which is spearheading efforts to reduce consulting costs. Recent requests for cost-cutting proposals from consulting firms, including Deloitte, underscore the government's focus on achieving greater efficiency and savings.

Financial Implications and Employee Concerns

Despite the contract cuts, Deloitte projects higher revenue for the fiscal year ending in May. However, employees are bracing for potential changes in performance bonuses in the upcoming year. The evolving landscape, influenced by government actions and economic uncertainties, has created a sense of unease among Deloitte's workforce.

The impact of these developments on company culture and employee morale remains a topic of discussion within the organization. Deloitte's response to these challenges and its commitment to supporting affected employees will be closely monitored in the coming months.

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By: lvaranasi@businessinsider.com (Lakshmi Varanasi)
Title: Deloitte to Lay Off Employees Amid Federal Crackdown on Consulting Contracts
Sourced From: www.businessinsider.com/deloitte-planning-layoffs-doge-federal-contracts-consulting-industry-2025-4
Published Date: Fri, 04 Apr 2025 06:32:53 +0000