In an announcement to the firm on Thursday, KPMG chief executive Gary Wingrove said the 200 redundancies — about 2 per cent of its 9,000-strong workforce — “simply cannot be avoided”.
The redundancies are expected to occur in areas where demand has dropped dramatically or where the firm expects a reduction.
Further, staff of the big four firm will see a 20 per cent reduction in salary for four months commencing in May, although employees earning less than $62,000 per annum would be shielded from the pay cuts.
Likewise, salaried partners will also see a 20 per cent pay cut, while equity partners will bear an effective pay reduction of 36 per cent.
In addition, equity partners will forgo a partner distribution payment, equating to 5 per cent of annual earnings, that was due in April.
Partner and director promotions will also be postponed until the end of the year, on top of the big four firm’s recruitment freeze.
KPMG employees will also be allowed to take special leave for up to a period of four months, paid at 20 per cent of their salary.
“Some areas of our firm are as busy as ever, with clients coming to us for support as they face up to the challenge of reshaping their business to meet the requirements of the new world. In other parts of our business, activity has declined, and we’ve seen some of our clients forced to take terribly difficult decisions,” Mr Wingrove said.
“We too have to make tough calls. And the decisions announced today are geared at protecting as many jobs as possible today, and for the future. I strongly believe these measures will help ward off larger job impacts in the longer term.
“We have limited these impacts as much as possible, and I sincerely regret that some of our colleagues will be leaving us.”
While the duration of the economic downturn continues to be uncertain, Mr Wingrove has committed to sharing its savings with the workforce if the bounce-back occurs sooner than anticipated.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.