Accounting and consultancy giant Deloitte has told its UK employees that reduced profits mean it will promote fewer people, reduce the average salary rise, and cut bonuses.

Next year Deloitte will increase UK employees’ salaries by 2.9%, compared with the 5% pay rise for the previous year, reflecting a “need for caution given the current market outlook”, according to an email sent by UK senior partner Richard Houston to staff earlier this week, and seen by the Financial Times.

The firm said it would also promote around 5,500 employees compared with the 6,800 promotions last year, and above 7,000 the year before that.

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Employees in the Big Four firm’s consulting arm would not receive full bonuses, the email stated, which would be reduced on average by 20%. Partners’ pay levels would also be affected.

Deloitte’s consulting business “faced a particularly challenging year and fell materially short of its performance goals”, Houston wrote.

“At the start of FY25, we expected greater economic stability and a gradual return of growth opportunities. But an early election, geopolitical complexity and unexpected economic headwinds – like changes in trade policies – have continued to cause market uncertainty,” he said.

The company’s deals business and its tax and legal arm have performed above profit expectations and were set for full bonuses. Its bonus structure had been amended, Houston said, and would better reflect the “variations in performance across our businesses”.

Deloitte UK said: “Amid ongoing market uncertainty, we are pleased to be able recognise our people for their hard work with salary increases, bonuses and promotions this year. This is alongside other benefits such as fully funded private medical insurance, recently enhanced family policies, and our commitment to offering flexibility and choice in our ways of working.”

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