Some staff feel Deloitte and KPMG are putting profits over welfare

The revenues of the Big Four in Australia have boomed in recent years, with the latest full financial year having seen aggregate revenues of the quartet surpass the $9 billion mark for the first time. Despite this apparent success, however, the firms have also overseen swathes of job cuts in recent months – something staff claim shows the companies are putting their profits before their people.

Illustrating just how rapidly the Australian consulting market has expanded its revenues since 2015, analysis from Consultancy.org recently found that the Big Four alone are now worth more than AU$9 billion in the country. The world’s largest professional services firms of Deloitte, PwC, KPMG and EY have each grown their revenues at a rate of more than 30% over the past five years.

However, the strong economic performance of the Big Four’s Australian wings has not insulated their staff from the impacts of Covid-19. In June, PwC and Deloitte announced they would be slashing 700 jobs each in Australia. This followed KPMG’s decision to cut 200 jobs in April, and cutting pay in May.

Meanwhile, EY committed to sizeable cost-cutting measures – including reducing the pay and hours of staff by at least 20% – helping to steady profit per partner at $633,000 – though it did announce it would repay the staff impacted by cuts via a Covid-19 bonus, shrinking the reduction to 4%. The fastest grower of the quartet has however managed to maintain all its staff.

Following the range of measures the Big Four have taken to safeguard their bottom line, reports from the Sydney Herald suggest that some staff are becoming increasingly distrustful of their bosses. According to the newspaper, employees of Deloitte and KPMG in particular accused partners of “prioritising profits over staff welfare,” and of “using the coronavirus pandemic” as an excuse to slash pay and quickly force through redundancies.

Deloitte

In the case of Deloitte, staff cited the fact that under two months before the firm shed 700 of its workers, they were told 20% pay cuts had been put in place in April to prevent wider job losses. One anonymous employee told the Sydney Herald, "The greater good was that everyone kept their job.” However, after accepting the cuts for this greater good, Deloitte staff were soon greeted by the news that hundreds of colleagues – including employees who had spent almost two decades at the company – were still for the chop, and that the cuts still stood.

One of the Deloitte employees argued that pay packets should have been immediately reinstated following the loss of the jobs. They added, “After all the pay cuts were to avoid job losses… After the redundancies the headcount matched production of the firm and therefore everyone is busy with work – no reason therefore to continue pay cuts. The only reason to continue pay cuts it to protect partner profit.”

A Deloitte spokesperson said the company stood by its moves to restructure the company, stating, “We have made our decisions iteratively, based on the financial impact of the Covid crisis on our business, together with the information we have about the ever-changing state of the Australian economy.”

Deloitte also stated that partner pay was reduced by 25%, while its 20% pay cuts only applied to workers on more than AU$65,000 per year. And, while the pay cuts were set to run to October 1st, last week the Big Four firm unveiled that it has ended the measure a month early on the back of better than expected revenue.

However, another Deloitte staff member highlighted cuts to the firm’s in-house pension scheme. According to the employee, who also said they felt “the integrity of the firm is gone,” staff signed up to the superannuation scheme had life insurance pay-outs reduced by 20%, and many claim they were not informed of the changes before they were implemented.

KPMG

Elsewhere, staff from KPMG said they were given less than two days of notice before some 200 people were made redundant in April. While a KPMG spokesperson confirmed the workers were paid full redundancy entitlements and offered additional out-of-work support, the announcement came as a surprise to staff, some of whom believed the firm had been slow to implement health precautions to protect staff from the virus.

According to the Sydney Herald, the move is similarly viewed with suspicion, as months later KPMG reported its annual revenue had increased by 7% over the year to more than AU$1.9 billion. The firm saw growth in all areas of the business including its auditing, tax, enterprise and management consulting divisions, while in 2020 it has won a number of lucrative government tenders worth millions of dollars.

Five tender bids for contracts with the Victorian government alone are worth more than AU$4.17 million combined, with the earliest contract worth AU$459,124 effective from just three weeks after the cuts were announced.

KPMG Chief Executive Gary Wingrove did tell staff in June the impact of the pandemic on the company had been “slightly better than we thought”, while confirming that the one-third of employees who were given salary reductions would be repaid. He added, “Our clients are continuing to ask us for support and advice – albeit in different ways to our original plan – we have experienced a trading result these past few months that is slightly better than we thought.”