Back in February, KPMG announced internally it would be cutting about 2% of its workforce—specifically 700 or so employees from its advisory practice—because, according to KPMG U.S. Vice Chair of Advisory Carl Carande, “we continue to have more people than needed to meet client demand.” Four months later, the same issues persist at KPMG, which has resulted in the Big Four firm telling staff on Monday that it’s planning to cut another 5% of its U.S. workforce—this time impacting folks in audit and tax, as well as advisory.
KPMG employs roughly 40,000 people in the U.S., so it’s estimated that approximately 1,970 professionals will lose their jobs.
According to Going Concern, KPMG staff were told about the workforce reductions earlier today during all-hands calls for each service line. In an email to staff, which Going Concern published in full, KPMG U.S. Chair and CEO Paul Knopp wrote that the firm is “experiencing economic headwinds that are not unique to our business or firm” and KPMG “planned for a level of attrition that has not materialized.”
“These economic headwinds, coupled with historically low attrition, translate into a significant mismatch between the size of our workforce and the measure of resources that will be needed to deliver services in the coming year. The workforce reduction is designed to address that mismatch,” he said.
Knopp stated that those impacted by the job cuts in tax and audit would be notified today, while those impacted in advisory would be told later this summer. According to a thread about the layoffs on Reddit, those losing their jobs in advisory will be notified in August.
All departing KPMG employees will receive severance, access to extended health and well-being benefits, and career transition services, according to Knopp.
In the Reddit thread, one person who was told they were being let go said, “I’ve been in audit with KPMG for nearly three years and was up for senior promotion in October. This was completely out of the blue.” Another said, “Been in audit at KPMG ~18 months as an experienced senior hire. Was getting put up for October promotion to manager … appears that won’t be happening.”
This is the third major layoff at KPMG within the last three years. During the first year of the COVID-19 pandemic, the firm let go of 1,400 employees, just under 4% of its total workforce, in September 2020. At that time 396 professionals from advisory were laid off, as well as 194 from tax and 189 from audit. The remaining 620 or so employees who were laid off had non-client-facing roles.
This latest round of KPMG job cuts is the first among the Big Four firms in the U.S. this year to affect client-facing employees outside of advisory or consulting. In April, EY announced internally it was laying off 3,000 employees, or about 5% of its 54,000-person workforce, with the job cuts primarily occurring within its consulting, strategy and transactions, people advisory services, and core business services areas. That was followed a week later by Deloitte telling staff internally it would be laying off roughly 1,200 employees, or 1.5% of its 80,000-person workforce, between April and June. The majority of those employees worked in risk and financial advisory. And according to posts on Reddit, PwC has been stealthily letting go of low performers in advisory this year, but the job cuts there have allegedly been much less than at the other Big Four firms.
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Tags: Accounting, Advisory, Auditing, Benefits, Firm Management
