Background: KPMG is one of the Big Four consulting firms, alongside PwC, Deloitte and EY, with more than 9,000 employees operating across 138 countries. In Australia, government work has historically been a major revenue stream for the firm. Unfortunately, that revenue stream took a hit last year after the Australian government slashed spending on public service consulting.

What happened: KPMG Australia’s government consulting revenue fell from more than $300 million in prior years to just $106 million. At the same time, clients are pushing consultants to use AI to work faster and charge less, squeezing margins even further. As a result, KPMG reported a 20% drop in advisory revenue for the 2024-25 financial year.

What else: To cut costs, KPMG has decided to move around 200 executive assistant roles, roughly two thirds of its EA workforce, to the Philippines, where wages are significantly lower. The firm estimates the shift will save about $17 million a year in wage costs.

What's the key learning

💡In industries like consulting where business models are near identical, competition gets dialed way up. In Australia alone, the Big Four are competing not just with each other, but with more than 3,400 consulting firms offering similar services.

💡With clients able to easily compare firms, and now benchmark humans against AI tools, there is constant pressure to lower prices, improve efficiency and deliver more with fewer people.

💡Offshoring is no longer experimental. Nearly a decade ago, EY moved executive assistant roles offshore, and once one major firm proves the model works. And with shareholders and boards demanding cuts, firms like KPMG are feeling intense pressure to follow suit.