A second wave of job losses, this time among professionals, is hitting the Australian economy as professional services firms, law firms, advertising agencies and universities adjust to the squeeze on their revenues due to the downturn induced by COVID-19.
Deloitte Australia, one of the big four professional services firms, yesterday announced that it would shed 700 professional staff from its 10,000-strong Australian workforce.
While revenue has grown for the financial year by 10 percent, the firm had experienced a significant decline in its revenue base across the fourth quarter as a result of the effects of COVID-19, including a decline of 19 percent year-on-year last month, Deloitte Australia chief executive officer Richard Deutsch said in a release to staff.
In particular, the consulting division, which provides advice to business and government on business processes, mergers and compliance, has been seen a sharp downturn in future work.
“From the beginning of the COVID-19 crisis two of our important principles have been to preserve as many jobs as possible while also protecting the long-term sustainability of the firm,” Deutsch said.
In April, the firm announced a short-term reduction in annualized pay of 8 percent for the majority of staff.
“Unfortunately, the last quarter of our 2020 financial year has seen a substantial drop in revenue and operating profit. We expect this trend to extend into at least the first quarter of our new financial year,” he said.
PricewaterhouseCoopers Australia announced last week that it would cut 400 staff from its 8,000-strong workforce, mainly from the consultancy and financial advisory division.
KPMG Australia cut 200 staff in April and last month staff opted for a 20 percent pay cut for working the same hours for four months as the firm began planning a phased return to work.
The law firms have been tight-lipped over their strategies to meet a downturn in legal work. Ashurst Australia has cut partner draws by 20 percent for six months and staff took pay cuts until next month, with a similar cut in hours.
Other firms have cut partner draws by up to 50 percent and furloughed workers, but whether legal work will pick up in the second half of this year, remains to be seen.
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