(July 14): KPMG is preparing to cut hundreds of jobs and slash partner pay by up to 20% in Australia amid the fallout from allegations that its local unit used confidential client information to win business, according to a report by the Australian Financial Review.
The redundancies are likely to spread across the firm and could even surpass 1,000, the AFR said, citing people familiar close to the firm. Any cuts will not be announced until the firm picks a permanent chief executive officer in the coming weeks, though senior leaders are already scrutinising client bookings to gauge how hard its pipeline of work will be hit from the scandal, according to the AFR.
KPMG is evaluating a range of options, including reviewing its operating model, cost base and workforce needs, to ensure the firm remains well positioned for the challenges ahead, the publication reported, citing a spokesman. No decisions have been made on specific measures yet, the spokesman told AFR.
KPMG Australia already said last month its chair and two other audit partners will leave the firm as part of a broad restructuring. It has agreed not to bid for new federal government work for three months. Australian authorities meanwhile proposed sweeping changes this month to the sector including new powers to police the industry and impose bigger fines for poor behaviour.
There is another scheduled parliamentary hearing for Aug 14, after the last one saw executives from the firm grilled by lawmakers.
The firm, which employs about 9,000 people including close to 700 partners, reported revenue of more than A$2 billion (US$1.4 billion or $1.8 billion) in the financial year ended June 30 last year.
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