The median pay of KPMG equity partners ranges between $500,000 and $700,000 a year, meaning the cuts will be worth between $85,000 and $120,000 of annual income.

Salaried partners and staff earning more than $62,000 will be asked to take a pay cut of 20 per cent between May and August, which works out to seven per cent of annual income.

“This week we will undertake around 200 targeted redundancies, which simply cannot be avoided," Mr Wingrove said.

"These are occurring mostly in areas where demand has dramatically reduced or where we expect a reduction, and where all options for redeployment have been exhausted. We have limited these impacts as much as possible, and I sincerely regret that some of our colleagues will be leaving us."

If the expected downturn turns out to be shorter than the firm is preparing for, Mr Wingrove has committed to paying back any savings from the measures to partners and staff.

Each passing day of the COVID-19 outbreak sees more companies from across the economy announce sweeping cuts to spending and flagged job cuts.

The professional services sector has been hit hard as large companies including bank NAB and airlines Virgin and Qantas slash their consulting spend. Spending on many types of advisory work is classed as a discretionary "third-party" cost at many corporates.

The drop in demand has led big four rival Deloitte to shut down for a week in April, with the entire firm forced to take the time as annual leave. A senior partner also issued an urgent request for audit and assurance partners to quickly bill their clients last week.


EY, formerly Ernst & Young, has cut the amount of money partners can draw from the business, frozen recruitment and slashed discretionary spending as part of a range of measures designed to avoid job cuts.

Cut pay, save jobs

Mid-tier accounting firm Grant Thornton has gone a similar way to KPMG by sharing the financial pain across the firm. Grant Thornton partners will take pay cuts of between 20 per cent and 50 per cent, while 95 per cent of staff have agreed to cut their hours and pay. CEO Greg Keith said his aim is to avoid completely, or dramatically reduce, the need for staff cuts.

The moves at KPMG are designed to save as many positions as possible at the firm, Mr Wingrove said.

“Australia is facing a period of unprecedented volatility, uncertainty, and stress,” he said in the message to the firm.

“Some areas of our firm are as busy as ever, with clients coming to us for support as they face up to the challenge of reshaping their business to meet the requirements of the new world. In other parts of our business, activity has declined, and we’ve seen some of our clients forced to take terribly difficult decisions.


"We too have to make tough calls. And the decisions announced today are geared at protecting as many jobs as possible today, and for the future. I strongly believe these measures will help ward off larger job impacts in the longer term."

He said that "partners will be more significantly impacted" by the cost-cutting measures.

"Equity partners in the firm have already agreed to forego a partner distribution payment due in mid-April and now, over the four months from May, equity partners will take an effective pay reduction."

“Our focus is on distributing the impact fairly, on being there for our clients during this crisis, and on supporting them into the post-COVID-19 future as they seek to rebuild, reconnect and grow," Mr Wingrove said.

Partners also face the prospect of annual profit, which is distributed to equity owners, being hit by the continued downturn.

The firm will also carry out a range of other measures to rein in costs. Partner and director promotions have been postponed until the end of the year, discretionary spending has been slashed and new recruitment halted.

Staff will also be able to apply for special leave for up to four months at 20 per cent of their salary and the firm may also accept requests for reduced hours.