The impacts of the KPMG South Africa scandal have reached a disastrous level.
The headcount of KPMG South Africa will drop by 400 employees after the recent accounting scandals in south Africa. The accounting scandals have caused KPMG to lose key clients like Barclays South Africa and the South Africa Auditor General contract.
KPMG South Africa Office Closures
These headcount reductions will impact 4 offices in south Africa. KPMG will be closing its regional offices in Bloemfontein, Mbombela, Polokwane and East London
The loss of jobs and closure of offices are a result of the recent gupta scandal and the vbs bank scandal in south Africa.
Most of the job losses will be lost in the firm’s audit line of service but there will also be losses in the consulting and administrative branches.
More KPMG Job Losses
There used to be 3,400 professionals in the KPMG south Africa office before the scandals, but 800 professionals have left the firm since the scandals. This leaves the firm with about 2,600 professional before the 400 employee cut.
KPMG claims that they will maintain a strong footprint in the region with 130 partners and 2,200 staff.
KPMG SA Brings In Leaders From KPMG International
Unfortunately, this is not good enough because KPMG has decided to bring in leadership from KPMG international. There is no word where exactly the partners will come from that will help change the KPMG south Africa firm. These executives will take leadership positions within KPMG south Africa including board positions and senior client service positions.
The KPMG south Africa CEO says that these changes were needed and are welcomed and that the KPMG South Africa firm will focus on doing fewer things in a better fashion.
These executives will no doubt try to improve morale in the region including improving controls and procedures. They will also try to rebuild the brand of KPMG and also try to keep the clients that the firm has.
In conclusion this is more terrible news for KPMG South Africa.
They could potentially end up closing the office in the region.
They are hopeful that these executives will bring sweeping changes and preserve their brand in the region. If KPMG loses their South Africa office, what does this mean for offices in other regions? We’ve already seen PwC banned in India and other firms face similar penalties around the globe. It’s important for KPMG to stop the bleeding before they lose millions of dollars in the region and around the globe.