KPMG Australia cuts senior partner costs by $13M

• KPMG Australia has halved the compensation cost of its senior partner ranks following client losses and reduced demand.
• The average annual income for local partners is projected to fall 20% this financial year.
• The firm is executing internal cost-cutting measures to stabilise operations after losing a major auditing opportunity.

KPMG Australia has halved the annual compensation cost of its senior partner ranks to $13 million as part of an internal cost-cutting programme.

The strategy follows a period of reduced client demand and the loss of key commercial opportunities over recent months.

“Difficult market conditions would continue this financial year and beyond, partly because of challenges created by our own failings,” said KPMG CEO John Sams.

Under the overhaul, the number of partners in band 11 or higher decreased from 17 to about 10, while the average local partner distribution is projected to decline by 20%, or roughly $144,000 from last year’s $717,000 average.

The firm stated that these executive reductions will assist in funding band increases for approximately 150 lower-tier partners.

Prior to these partner income adjustments, the advisory firm announced plans to reduce its 8,000-person Australian workforce by 5%, which could impact up to 1,000 employees.