Big Four feel the heat as promotions drop, clients tighten purse strings

“Major consulting clients like the IT sector globally have slowed down and there will be a domino effect. Our promotion numbers will go down and even hikes and bonuses, which typically come in August/September, will get impacted,” said a senior partner in one of the Big Four firms.

Last week, Deloitte’s promotions in India were announced. Mint learnt that about 4,600 people were promoted compared with about 5,000 last year – effectively an 8% drop. Among them were 74 people who became partners or executive directors compared with 150 last year.

EY announced its partner promotions last week as well. Mint learnt that 110 senior executives became partners compared with 124 last year.

Deloitte did not respond to Mint’s queries. EY did not comment on last week’s partner promotions.

“To serve the growing needs of our clients and their market activity, we maintain our pace of hiring which is approximately 13,000 people annually. Even though our appraisal cycle is a quarter away, we anticipate that our promotions will largely be in line with previous years,” Arti Dua, partner and talent leader at EY India, said in an email response to Mint.

The partnership model in consulting and audit firms is similar to that in law firms. Equity partners invest in the company, bring in clients and get a chunk of the firm’s revenue, while regular partners are seniors who get a fixed compensation and bonus.

There are about 3,000 partners between the Big Four and, according to senior executives in the sector, hikes were in the 7-9% range last year. This time, they may hover in the 5-7% range.

High performers

KPMG in India agreed that the impact of external market forces will be accounted for in this hike cycle.

“While external factors and industry trends may influence adjustments in increments, bonuses, and promotions, we continue to prioritise meritocracy, ensuring that high performers are recognised and rewarded competitively,” said Reena Wahi, partner and head, people, performance and culture at KPMG in India.

For KPMG, the focus will remain on high performers despite sluggishness in the global business environment.

“While the global economic slowdown has led to cautious spending and budget adjustments across industries, KPMG in India remains committed to investing in our people, fostering innovation, and driving value for our clients,” Wahi noted.

PwC did not respond to Mint’s queries on promotions and pay increases.

Professional services firms are restructuring on the back of slower growth and an uptick in regulatory pressure in the global markets, The Economic Times reported in April.

Besides layoffs in global IT firms such as Microsoft, which has sent jitters down the pipeline of the sector, the domino effect is seen in other areas too. The Big Five of India’s IT services sector – Tata Consultancy Services Ltd, Infosys Ltd, HCL Technologies Ltd, Wipro Ltd and Tech Mahindra Ltd – are sending out mixed signals on hiring and pay hikes as they navigate uncertainties resulting from US President Donald Trump’s tariff war.

Mint reported in May that startups have slowed down their pace of hiring as they hunker down, tighten their belts and measure the impact of artificial intelligence on workflows. Large tech-enabled businesses such as Zomato, Cars24, and Gupshup are among those that have undertaken layoffs over the January-March quarter.

For the Big Four, while salary hikes are yet to be announced, there may be revisions on the back of geopolitical crises, tariff disputes, and cautious client decision-making. For India Inc, Deloitte had estimated an average pay hike of 8.8% and Aon had predicted 9.2%.