Sunday 3 November 2019 11:12 pm

Big Four firm KPMG denies reports of partner cuts amid cost-cutting drive

KPMG has denied reports that it is gearing up to cut 10 per cent of its UK partners, as the Big Four accountant presses on with a significant cost overhaul.

The company is said to be preparing to let about 65 partners go by Christmas, after a review of individual performance, according to the Financial Times. 

Read more: KPMG in exclusive talks to sell pensions arm to private equity firm for more than £200m

But a spokesperson said the company had no plans to reduce headcount over the next two months.

They said: “It is critical that our firm constantly evolves as we build the mix of capabilities required to service the changing needs of our clients. 

“To achieve this we are significantly increasing our investment in all of our core businesses – audit, tax, deals and consulting. 

“This year we have appointed 50 new partners and 200 new directors, across all parts of our business. 

“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.”

The performance review is said to have considered how much cash partners had billed their clients, as well as other factors including how important their work was to the company’s future plans.

Tim Jones, who became chief operating officer in May, was reportedly given the task of making a list of partners who would leave the firm.

At first, that list included about 90 people, a person familiar with the situation told the newspaper. They added the partners affected work across the business.

Last month, KPMG launched a £100m cost cutting exercise called Project Zebra.

The accountancy firm has launched the efficiency drive amid a £200m investment in its audit practice.

Read more: KPMG launches £100m cost-cutting programme

The investment in its audit practice followed a scathing audit quality report from watchdog the Financial Reporting Council in 2018 in addition to its role as auditor to collapsed outsourcer Carillion.

KPMG said it was “resetting our cost base across the firm” and said it expects to remove circa £100m of cost as a result”.