To grow its business, retain employees, and improve the calibre of its auditing services, KPMG is reducing the number of country units it works in worldwide.
According to people familiar with the situation, the Big Four accounting firm is halfway through a series of mergers to achieve that goal.
According to the sources, by the end of next year, it hopes to have reduced the number of these units from around 120 in 2023, when it started the campaign, to between 30 and 40.
The company has trimmed its number of country units to roughly 75.
Although their new clusters will have their leadership, administration, and shared investment areas, the combined national units will technically still be part of more significant operations.
“Greater integration of our businesses brings a number of benefits to our clients, people and the capital markets,” Gary Wingrove, global chief operating officer of KPMG, said in a statement, referring to the mergers.
Most countries ‘ international accounting and consulting networks are established as independently owned businesses that share intellectual property, branding, and technology. Equity partners own shares or units in the company in exchange for returns and a stake.
KPMG’s initiative follows a trend among accounting firms to investigate restructuring their organizations to assist in recruiting and retaining employees and counteract slowing development in specific areas.
Due to internal conflicts, Ernst & Young abandoned plans to split its global audit and advisory businesses in 2023. In recent years, dozens of non-Big Four companies have sold shares to private equity investors.
In general, KPMG consolidates several businesses in a single area into a larger cluster.
For instance, KPMG previously stated that it would merge its operations in 13 countries in Africa’s southern, eastern, and western areas this year.
According to those who know the situation, smaller units will significantly profit from combining their resources with those of other units in areas such as technology or product investment for auditing, tax, and advisory services.
According to the people, units that bring in less than $300 million a year are the main targets of the cuts.
The mergers should be mostly finished by September 30, 2026, when KPMG Global Chairman Bill Thomas’s term ends.
