KPMG South Africa anticipates that up to 400 people will be leaving the firm as a result of its plan to close certain regional offices.
In a media statement today, KPMG SA announced a reshaping of the business and further support from KPMG International to strengthen leadership capacity.
These changes follow a strategic review of the firm’s activities and take into account recent client losses and current levels of demand for certain services. They are the latest in a series of initiatives announced by the firm in recent months to support its drive to restore KPMG’s strength in South Africa.
The firm says it will operate a refocused advisory business and scale back its internal business support to reflect its reduced footprint. “We plan for the business to operate in future out of four hubs in Johannesburg, Cape Town, Durban and Port Elizabeth”.
More than 130 partners and 2,200 employee will remain, supported by the international network of KPMG of 200,000 people and will continue to offer a wide range of the core services that their clients require.
“The leadership changes will involve embedding in the firm for an extended period a number of senior KPMG partners from across the international network into board and executive positions, as well as senior client service roles. This is to further strengthen the leadership capacity available to the South African firm as it navigates the current challenges it faces, implements the enhanced internal procedures to which it has committed, and continues to serve our significant client base to the highest levels of quality. Further detail on these leadership changes will be announced in due course.”
Nhlamulo Dlomu, chief executive of KPMG South Africa, commented:
“These hard decisions were necessary to put the firm on a more sustainable footing, while ensuring we continue to offer our clients the best service and support. We are putting quality and integrity at the heart of the business and, from now on, the firm will be focused on doing fewer things better. I am confident that we have taken the right steps to reform and reshape the business. Now we need time for these to take hold.
It is a matter of great regret that, as a result, we will be parting company with loyal colleagues. We are taking all possible steps to ensure these changes are managed in a caring manner and that everyone is treated with dignity.
The firm has shown tremendous resilience throughout this period. The loyalty and commitment of our clients and colleagues has only added to our resolve in pursuing this path.”
Professor Wiseman Nkuhlu, chairman of KPMG South Africa, commented:
“Since becoming Chairman, my priorities have been to rebuild relationships with society and to reassure clients of our professional rigour and integrity. Today’s announcement, difficult but necessary, is part of our mission to restore KPMG’s reputation and honour its legacy of 130 years’ service in South Africa; to make it a firm that our people, our clients and the public can again be proud of.
The steps we have taken will enable us to best service the needs of clients, make a broader contribution to society, while establishing the platform that will allow us to again earn the right to grow in South Africa.”
Bill Thomas, chairman of KPMG International, commented:
“KPMG South Africa is an important part of our global firm. Today’s announcement to embed additional senior international partners into the South African leadership team is evidence of the significant investment KPMG International is providing to help ensure KPMG South Africa can continue to focus on trust, quality and integrity.”