Deloitte UK
Firm bets on digital growth despite wider slowdown in consulting. Squirrel_photos/Pixabay

Deloitte UK has reported its first revenue fall in 15 years, underlining the pressures facing the professional services sector in a weaker economy. The firm's income slipped 1 per cent to £5.68 billion in the year to 31 May 2025, down from £5.75 billion the previous year.

The slowdown was largely driven by a sharp drop in consulting activity, as clients delayed major projects during a period of economic uncertainty. It is the first contraction for Deloitte UK since 2010, and follows years of consistent growth that positioned the firm as a market leader among the Big Four.

Despite the fall in revenue, Deloitte raised its investment in technology and AI while still increasing partner payouts. Executives argue this dual focus on efficiency and digital capability is key to long-term growth.

Revenue Slips, Profits Hold

Consulting was the hardest-hit segment, with revenues down around 10 per cent as businesses scaled back transformation programmes. Spending cuts were most visible in financial services and consumer industries, which trimmed back large-scale change initiatives.

Even so, Deloitte UK's distributable profit rose 4 per cent to £789 million. Average profit per equity partner climbed from £1.01 million to £1.05 million, supported by cost controls and improved margins. The firm reduced expenses by slowing hiring, limiting promotions, and trimming discretionary travel.

Tech Push Despite Slowdown

Alongside cost-cutting, Deloitte continued to expand its digital operations. The firm committed £158 million to technology investment during the financial year, up from £135 million the year before.

The spending went into four new technology delivery centres in Belfast, Cardiff, Manchester and Newcastle, as well as new offices in Bristol and Aberdeen. These hubs are designed to strengthen Deloitte's ability to deliver advanced digital and data-led projects for UK clients.

A centrepiece of the strategy is PairD, Deloitte's in-house generative AI platform, which the firm says now handles more than one million prompts each month from UK staff. Globally, Deloitte has also launched an AI Infrastructure Centre of Excellence to help clients scale artificial intelligence and data services.

Market Strain and Strategic Priorities

The decline in consulting demand highlights how exposed professional services firms are to wider economic pressures. Surveys show businesses are delaying major digital transformation plans and reassessing budgets amid rising costs and weaker market confidence, according to Business Insider.

By raising technology spending while revenues fell, Deloitte is signalling that it sees future growth in data, digital platforms and AI-driven services. Analysts say the move suggests a focus on higher-margin areas and a shift towards services that can help clients manage disruption more efficiently.

Testing Strategy

Deloitte's ability to balance falling revenues with higher profits and expanded tech spending illustrates both the strain and resilience within the sector. For clients, the strategy underscores the growing role of artificial intelligence and digital delivery in professional services.

The test will be whether the £158 million invested translates into sustainable growth at a time when firms across the Big Four are grappling with slower markets. For now, Deloitte UK is betting that transformation through cutting-edge technology will define its future, even as its traditional consulting arm struggles.

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