The savings will be redirected to high-demand advisory work with a focus on technology and AI.
KPMG has announced a major overhaul of its consulting division that includes cutting 200 senior staff and pivoting towards technology advisory in an effort to save $80 million and adapt to industry pressures.
The big four firm, breaking the news to consulting staff on Friday, said the savings from the reduction would be reinvested in “digital solutions, alliances, industry expertise and new delivery methods”.
“The traditional ways of working, and some of the legacy assessment and advice services our firm has offered the market are no longer in the same demand,” consulting managing partner Paul Howes said.
“We must now make a rapid, foundational shift to our business to adapt to this generational change … This is not about minor adjustments, but about flipping our business to have a strong focus on transformation.”
It is KPMG’s second major round of redundancies in as many years, following the cutting of 200 roles – mostly in consulting – in February 2023.
Its big four rivals have also been forced into taking similar measures to cope with the fallout of the PwC tax leaks scandal and consulting business drying up after a boom during Covid.
PwC in March culled 329 staff and 37 partners and EY reduced its headcount by 100 in April. Deloitte has also announced an overhaul of its global operations in March, although it said only a “small number of redundancies” were made in Australia.
KPMG’s latest round of cuts are set to claim around 6 per cent of the firm’s 4,000 consulting staff and would not affect anyone below the role of senior consultant, according to the Australian Financial Review.
Howes said an additional 50 consulting staff would also be upskilled and moved to divisions with higher demand, focussing on emerging technologies such as AI.
“Some teams will transition to other divisions of the firm, and we will be looking to redeploy and upskill as much as possible into areas of high demand, ensuring people with the right skills are in the right places,” he said.
Staff impacted by the changes would be notified by 21 June, the firm said. The broader overhaul of its consulting division, which accounts for around 40 per cent or $1 billion of annual revenue, would be finalised in August.
“We are taking a proactive and thoughtful approach to finalising our plan, which will anticipate what our clients require, and achieve sustainable growth and profitability,” Howes said.