Under-fire financial services company KPMG South Africa has announced a reshaping of its business – including a number of retrenchments, along with further support from KPMG International to strengthen leadership capacity.
KPMG is currently under investigation by the Independent Regulatory Board for Auditors in relation to its audits of several Gupta companies and has been dropped by several firms in recent months, including Finbond and the South African Institute of Chartered Accountants’ (SAICA) last week, and ABSA and Redefine Properties last month.
“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 company said in a statement on Monday.
“We anticipate up to 400 people leaving the firm as a result of our plan to close certain regional offices, operate a refocused advisory business and scale back our internal business support to reflect our reduced footprint. We plan for the business to operate in future out of four hubs in Johannesburg, Cape Town, Durban and Port Elizabeth.”
KPMG in South Africa will remain a business of significant scale with more than 130 partners and 2,200 employees, supported by the breadth and depth of skills and experience of the international network of KPMG of 200,000 people, the auditing firm continued.
“It will continue to offer a wide range of the core services that our global, regional and local clients require.”
The planned retrenchments make up approximately 15% of the company’s local staff count.
KPMG said that 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, it said, is to further strengthen the leadership capacity available to the South African firm as it navigates the current challenges it faces.
“Further detail on these leadership changes will be announced in due course.”
Nhlamulo Dlomu, chief executive of KPMG South Africa, said: “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.”