TLDR: Deloitte and KPMG in Australia have reported a downturn in their annual revenues for the recent financial year, primarily due to reduced demand for consulting and advisory services from both private and public sectors. This decline has led to workforce reductions at both firms, though leaders anticipate a return to growth, partly driven by demand for AI integration services.
Sydney, Australia – Two of the ‘Big Four’ accounting and consulting powerhouses, Deloitte and KPMG, have announced a notable decline in their annual revenues, reflecting a broader downturn in the demand for consulting and advisory services. The slump, particularly evident in their Australian operations, comes amidst a challenging economic environment and shifting client expectations.
Deloitte Australia reported an 8 percent decrease in its revenue, falling to $2.55 billion for the recent financial year. This contraction prompted the firm to implement measures to mitigate the impact, including a ‘recalibration of its workforce’ and an 8.5 percent reduction in equity partners’ earnings, aligning with the revenue drop. The firm’s staff numbers across its Australian operations consequently shrank from 13,077 in 2024 to 12,080, representing a 7.5 percent year-over-year reduction.
KPMG Australia also experienced a revenue decline, albeit less severe, with a 4 percent drop from $2.21 billion to $2.13 billion. The firm’s consulting revenue specifically saw a significant reduction, moving from $915 million to $749 million. To offset the lower income’s effect on partner profits, KPMG tightened its financial controls, which remarkably allowed for a 10 percent increase in average pay for its nearly 700 partners. KPMG’s workforce also saw a reduction, with staff numbers decreasing from 9602 to 8967, a 6.6 percent year-over-year decline.
Industry observers and firm leaders attribute the downturn to a ‘significant reduction in the use of consultants as well as the broader economic slowdown.’ A spokesperson or analyst noted that ‘shifting client expectations, heightened global volatility and the accelerating pace of technological advancement have all contributed to a complex operating environment throughout FY25.’
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Despite the current challenges, both Deloitte and KPMG are looking towards future growth, with a particular focus on emerging technologies. Both firms are ‘banking on big demand from clients integrating artificial intelligence into their operations,’ signaling AI as a key area for future revenue generation. This strategic pivot underscores the industry’s adaptation to evolving technological landscapes and client needs, anticipating that AI-driven transformation will fuel a return to growth after two years of contraction.
