A few short weeks ago, KPMG US cut a few hundred advisory jobs and KPMG Australia followed close behind with a reduction of about 200 or two percent of its approximately 10,000 staff. This, they said, was due to a slowdown in consulting work.
When Australian Financial Review wrote up the KPMG cuts, they mentioned that competitors at EY and Deloitte did not plan to cut jobs, despite having observed market conditions similar to those that spurred KPMG to cut people loose. “We are still experiencing solid growth and demand for our services across many parts of our business,” said EY Oceania CEO David Larocca. “We have pulled back on recruitment where necessary. We do not currently have any plans for reductions in our headcount.” Deloitte shook the whole thing off, with Deloitte Australia Chief People and Culture Officer Pip Dexter saying the firm was experiencing solid growth and planned to increase overall staff numbers (OK good luck with that, Pip).
Now PwC Australia has weighed in — and we can officially stop adding “Australia” after every firm name now that it’s been established that this article is about Down Under Big 4 firms — to say that while they’ve already seen client work drop off a bit, they don’t plan to get rid of anyone.
PwC Australia has experienced a fall in client demand from the peak hit early last year but, unlike KPMG, has no plans to go through the “painful” process of cutting jobs, chief executive Tom Seymour says.
In fact, the firm has 1100 open positions and has forecast growth of between 10 per cent and 15 per cent this financial year. That’s down from 17 per cent in 2021-22 but still above its long-run average growth rate.
The outlook for the nation’s largest professional services firm is consistent with rivals Deloitte and EY, which have told The Australian Financial Review they too had no plans to cut jobs despite the fall in client demand. These firms also reported that staff turnover had fallen as companies across the economy eased back on hiring.
Over the years, we at Going Concern have observed a pattern in times of economic trouble and you probably have, too. Firms say “we are not firing anyone” and technically they don’t, they just ratchet up PIPs and cut the “low performers” or worse, don’t put people on a PIP at all and say it was low performance anyway. We saw this during the early days of the pandemic when EY on this side of the globe fired a bunch of people who weren’t on PIPs “for low performance” and then, when questioned about it by staff who clearly knew what was going on, said there’s no rule saying they need to be on a PIP. Side note: you can read a powerful letter calling out EY management for the way they handled these layoffs-but-not-layoffs here.
We may be in for choppy seas ahead so keep your head down and your utilization high if you want to sail through it, no matter what the firms say.