KPMG to axe one-tenth of UK partners as a result of performance reviews
It seems the upcoming holiday season didn't starte with a good spirit for KPMG employees. The Big Four accounting firm, KPMG is all set to cut a tenth of its UK partners as it prepares to overhaul its business operations.
It is reported that the cuts are the result of performance reviews involving of some of KPMG’s senior team and form part of a wider effort to streamline costs and brace for a regulatory shake-up of the accounting sector. However, another media reports that KPMG has denied the news saying that around 50-60 partners leave the firm each year through natural churn.
However, according to reports, Bill Michael, Chairman of KPMG, told partners at a recent “roadshow” that the firm would take a harsher approach to managing performance. The company plans to cut about 65 of its UK partners 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.
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.
If reports are to be believed, Tim Jones, Chief Operating Officer was given the task of drawing up a list of partners who would be let go. It initially named about 90 partners. According to a person familiar with the matters said that the partners who will be affected work across KPMG’s business. The audit business which is heavily recruiting is least expected to observe any departure.
With this step, the exits will reduce KPMG’s current partnership from 635 members to about 570, although that number is expected to increase as the firm promotes more workers to partner level.
Earlier, KPMG launched “Project Zebra” to save £100m in costs, including the potential closure of its Mayfair members club, recalling hundreds of employees’ mobile phones, and making about a third of its 630 personal assistants redundant. The savings will help fund a £200m investment in its audit business over two-and-a-half years. The firm is also close to selling its pensions advisory business, which includes 20 partners and about 450 staff, to a private equity firm.