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.
“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.
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’.”
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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.