In a significant restructuring move, KPMG has laid off nearly 50 employees from its consulting division in New Zealand. This decision comes as part of a broader effort to adapt to the evolving needs of clients and the shifting landscape of the consulting industry.

Chief Executive Jason Doherty addressed the changes, explaining that KPMG has been gradually adjusting its consulting services over the years. However, he emphasised that the firm now faces the necessity for a more substantial transformation. 

“The needs of our clients and the consulting environment have evolved to the point where we must completely overhaul this part of our business. The time for gradual change is over; we need a transformation to ensure we’re prepared for the future,” Doherty stated.

Last year, KPMG outlined a strategic roadmap for its consulting division, aiming for significant advancements by 2027. However, the rapid shifts in client demands and purchasing behaviours—both locally in New Zealand and internationally—have intensified the urgency for change. 

“As client expectations and buying patterns evolve faster than anticipated, we have to speed up our own transformation and reshape our consulting model. This will involve a stronger focus on our technology, digital, and business transformation services,” Doherty added.

The recent layoffs mark a tough chapter for KPMG, with Doherty describing this aspect of the restructuring as the hardest decision to make. He assured affected employees and the wider team that the company is committed to providing support during this challenging transition. 

With a workforce of approximately 1,500 staff and a leadership team of over 100 partners spread across seven cities in New Zealand, KPMG has expressed its intention to navigate these changes while maintaining a robust operational framework.

The restructuring comes on the heels of similar actions taken by another Big Four firm, PwC, which also cut 50 jobs in its New Zealand operations due to declining demand for its government advisory services. This trend raises concerns about the broader labour market dynamics in the region.

The New Zealand labour market is currently facing challenges, with the unemployment rate rising to 4.6% in the June quarter and projections indicating it could reach 5% by the end of the year. The Reserve Bank has forecasted that unemployment might peak at 5.4% by mid-2024, reflecting the economic pressures affecting various sectors, including consulting and professional services.

KPMG’s decision to streamline its operations and focus on future-ready consulting practices aligns with a global trend where firms are reevaluating their service offerings to meet the demands of a digital-first world. By concentrating on technology, digital, and business transformation services, KPMG aims to position itself as a leader in addressing the evolving needs of its clients.

As the consulting landscape continues to transform, KPMG’s strategic decisions will likely shape its future trajectory and impact its competitive positioning within the industry. The layoffs, while challenging, may ultimately serve as a catalyst for necessary change that aligns KPMG more closely with market demands, ensuring its relevance in an increasingly dynamic environment.