KPMG U.K.’s better-late-than-never belt-tightening endeavor called “Project Zebra” is leaving carnage in its wake almost on a weekly basis.
First, about a third of the firm’s 630 administrative assistants are losing their jobs. Then, employees had to give up their work-issued mobile phones. Next, average pay per partner is reportedly being cut by 10% over last year to £550,000 in 2019. And the firm might pull the plug on its private members club known as Number Twenty.
Now the Zebra has about 65 KPMG partners in its path. The Financial Times reported yesterday:
KPMG will axe a tenth of its UK partners by Christmas following a review of individual performance, the latest in a series of measures to overhaul the Big Four firm.
The one-off cull of partners comes as the accountant dramatically scales back its costs and restructures its operating model as it tries to recover from a reputational crisis and prepare for regulatory changes to the accounting sector.
So after subtracting those 65 partners, that’ll leave 570 who are employed by the Queen’s KPMG. But the firm is quick to point out that it has appointed 50 new partners and 200 new directors across all business lines this year.
And according to an article posted by Accountancy Daily this morning, KPMG said that total number of partners leaving the firm is nothing out of the ordinary.
“In a typical year around the same number of partners will retire from the firm, often going on to senior roles elsewhere in both the private and public sector.”
But sources told FT that the firm is actively firing partners who are just taking up space and sucking up money:
The firm plans to cut about 65 of its UK partners, said two people with knowledge of the situation, marking its biggest single cut of partners in several years. In any given year, KPMG would expect roughly 45 partners to leave the firm, either through natural or forced retirement. However, this latest move is an active step being taken by the group during the first few weeks of its financial year. It is rare in the industry.
The performance review looked at the amount of money partners had billed their clients as well as other factors, including the importance of their work to the firm’s future strategy.
The partners who will be affected work across all of KPMG’s business lines, FT reported, but its audit practice is the least likely to see cuts, which is weird because one of the big reasons why KPMG’s reputation is garbage is because of the incompetence in its audit practice.
Anyway, remember, folks: KPMG U.K.’s 2019 financial results will be released next month. Should be a good time. Get your popcorn ready.