Large consulting firms rule out Australian job cuts
A quick succession of economic cycles has led to many recent highs and lows for the consulting market, with a current downturn threatening jobs. But Australia’s consultants can breathe a sigh of relief.
A moment of potential panic for Australia’s management consultants in the face of slowing advisory engagements may have eased somewhat, with several large firms claiming there won’t be any local cuts despite KPMG’s move to slash 200 jobs.
McKinsey & Company, Deloitte, Ernst & Young, and PwC have all now publicly stated that they have no intentions to retrench locally-based staff, although most will slow hiring in the short-term.
The Australian consulting employment market has experienced a pretty wild ride over the past few years, with a steady rise in headcounts leading into the 2020s suddenly hit by widespread job losses in the wake of Covid-19. One by one, members of the Big Four announced their intentions to cut fee-making staff, by as many as 700 in the case of Deloitte and initially 400 at PwC. Then the sector bounced back faster and stronger than expected.
Fast forward briefly, and all of sudden consulting and accounting firms were desperate to fill an unprecedented number of vacancies, the chronic skills shortage exacerbated by the country’s extended border closures and leading to record-high wages and all manner of novel employee incentives. Then the rebounding economy was hit by rampant inflation and impacted by the conflict in Ukraine, resulting in a much more tentative business market.
Such conditions and common reports of a notable softening in demand for non-essential advisory projects have led to fears of industry downsizing, especially with KPMG and then McKinsey planning sizeable cuts at the global level. The latter has since clarified to local staff that it doesn’t intend to cut any consultants from its Australia roster though, while the wider review of the firm’s operating model is said to be business as usual if not overdue.
Indeed, McKinsey’s global media relations director DJ Carella told the AFR that contrary to trends elsewhere, business hasn’t slowed at the firm: “With demand from our clients expanding, we continue to hire client-serving professionals and invest in our ability to serve clients. In parallel, we are redesigning the way our non-client-serving teams operate for the first time in more than a decade, so that these teams can effectively support and scale with our firm.”
At the local level, both EY and Deloitte and have also told the Australian Financial Review that jobs would be spared despite the slow-down, with the latter meanwhile welcoming its largest ever intake of 1,300 graduates and still projecting a 15 percent increase in revenues for this financial year. PwC, too, is forecasting revenue growth in the range of 10 percent to 15 percent, while all of the Big Four have reported a recent reduction in staff turnover.
“I would say we are sort of steady to maybe slightly slow – we’ve got about 1,100 open roles today, so we’re still hiring,” PwC CEO Tom Seymour told the publication. “We’ve worked really hard to make sure we’ve got the right amount of people but not too many people because you don’t want to have to get to doing redundancies in organisations. They’re painful processes. Our resourcing levels at the moment are set to the demand we’ve got.”
