KPMG, one of the world’s largest accounting firms, is set to undergo a major restructuring by merging dozens of its national partnerships in an effort to streamline operations and bolster global competitiveness. The move is part of an accelerated “clustering” strategy aimed at reducing the number of economic units within the firm, according to sources familiar with the matter.
The Financial Times reported that KPMG intends to cut down its network of economic units to approximately 32 by next year, a significant reduction from over 100 just two years ago. The firm has already initiated mergers in regions such as the Middle East and Africa, with a high-profile merger between KPMG’s UK and Swiss partnerships completed last year.
Unlike multinational corporations, Big Four accounting firms, including KPMG, have traditionally operated as networks of locally owned partnerships. This structure was designed to accommodate local audit regulations and protect individual partners from liabilities in other regions. However, as consulting services—which demand significant technology investments—become more central to the industry, KPMG leaders are pushing for greater integration to ensure financial sustainability and competitive advantage.
The consolidation efforts are expected to help smaller KPMG firms cope with the rising costs of technology investment and regulatory compliance while also minimizing risks related to audit scandals. The firm has set a $300 million revenue benchmark below which member firms may struggle to maintain their full membership in the global network. Moreover, KPMG is mandating that profit-sharing be at least partially implemented across merged entities, with a long-term goal of full profit integration.
While restructuring efforts are ambitious, history has shown that such mergers are not without challenges. A previous attempt in 2007 to create KPMG Europe by merging the UK, German, Swiss, and Liechtenstein firms ultimately failed due to inefficiencies. Similarly, a 2023 plan by EY to consolidate and float its consulting divisions collapsed amid internal disagreements. However, Deloitte has successfully executed similar integrations in Europe and Asia-Pacific over the past decade.
KPMG executives, including Chief Operating Officer Gary Wingrove, have emphasized that reducing the number of economic units will facilitate international business operations, improve service delivery, and create better career mobility within the organization. The firm remains committed to maintaining country-level legal entities to comply with local regulations, ensuring that audit integrity remains a top priority.
The accounting industry faces an uncertain outlook for 2025 due to economic and geopolitical instability, making strategic consolidation a crucial factor for sustained growth. Bill Thomas, CEO of KPMG International, has been granted a one-year extension to oversee the restructuring efforts, which are expected to continue until at least September 2026.
With increasing pressure on the Big Four firms to evolve in response to market demands, KPMG’s restructuring could set a precedent for how major accounting networks adapt to a rapidly changing financial landscape.
