The professional services firm was forced to slash 275 senior jobs over the summer to shore up its bottom line, after it became apparent its forecast for the year and subsequent levels of staffing were too optimistic.
Profits for its UK business, which employs more than 10,000 people, dropped £54m to £349m on the back of higher one-off costs despite an increase in revenues across the majority of its divisions.
Senior partner Simon Collins told City A.M.: “We budgeted for heavier growth than we got and that was mainly predicated on encouraging economic sentiment.
“We got off to a good start to the year, but we budgeted for double the growth, and in truth we held our nerve too long.”
Despite revenue growth across all of its divisions apart from tax – where revenues fell three per cent – the firm cut the hundreds of roles at senior management and director level after investing too heavily in the early part of the year.
“We could have done more stuff to improve profitability but we did it too late,” Collins said. “We mirror the economy a little because we’ve got such a wide range of clients. We’re forecasting growth again but with more realistic growth forecasts, and we have a better cost base now,”
The results show overall pay for partners at the business dropped to reflect the overall drop in profitability, with profits per partner down 17 per cent from £696,000 to £580,000.
The highest paid partner was former senior partner John Griffith-Jones, who retired at the end of August and is soon to be installed at the Financial Services Authority’s replacement the Financial Conduct Authority.
His total profit share was £3.1m.
Partner numbers remained relatively stable ticking up slightly from 579 to 602 over the year.
The firm – which alongside PwC, Deloitte and Ernst & Young makes up the Big Four – snapped up IT advisory firm Xantus this year and is also due to open a new office in London’s Tech City early next year to target high growth tech start-up firms.