Deloitte and KPMG are working to recover from a sharp drop in consulting demand, showing how top Australian firms are trying to return to growth. However, staff cuts and declining profits remain major obstacles. Deloitte Australia experienced an 8% revenue fall to $2.55 billion, while KPMG reported a 4% decline to $2.13 billion. These figures reflect a two-year slowdown in advisory work from both corporate and government clients.
This downturn follows several years of growth fuelled by digital transformation and government projects. With budgets tightening in private companies and public departments, the consulting sector is now being forced to cut costs and shift focus. Deloitte, the country's biggest consulting firm by revenue, responded by laying off over 900 employees and reducing its number of partners by 100 to adapt to tougher conditions.
Despite falling revenue, both firms have shown signs of resilience. Deloitte’s technology arm saw a 14% drop to $1 billion. Other service lines had smaller declines, apart from tax and legal, which rose slightly to $346 million. KPMG’s advisory revenue fell close to 20% to $749 million. Nonetheless, internal restructuring allowed the firm to lift average partner pay by 10% to more than $715,000. This compares with Deloitte’s average of over $500,000 per partner, which fell due to lower profit distribution.
Looking forward, both firms acknowledge the need for change. Investment in AI and growth in managed services are proving to be promising areas that help offset the decline in traditional consulting. KPMG’s leadership says most cost-cutting efforts are now complete and expects modest single-digit growth this year. Deloitte’s new leadership is also predicting growth across all parts of the business.
Still, a full recovery depends on various factors such as economic improvement and client demand for consulting services. AI-led efficiency and better resource planning are becoming top priorities as Australia’s leading firms navigate a changing professional services market.
