KPMG laid off nearly 700 people, mainly in its advisory business, or close to 2% of its total staff.
It’s the first Big Four firm to do so, according to the Financial Times, which broke the news of the layoffs Wednesday, citing a memo from Carl Carande, vice-chair of KPMG’s U.S. advisory business. A KPMG spokesperson confirmed the cutbacks Thursday to Accounting Today, saying the firm has been trying other ways to reduce costs, and it moved some of the advisory staff into other parts of the firm, such as tax and audit.
“Our business and outlook remain strong,” said the KPMG spokesperson. “However, we have experienced prolonged uncertainty affecting certain parts of our advisory business that drove outsized growth in recent years. We have reduced expenses and prioritized investments in those areas and remain confident in the future of our firm and these services. However, we are taking prudent actions to match our resources to the needs of the market today. These actions are incredibly difficult and impact people’s lives.”
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KPMG is providing a severance package to its outgoing employees.
“We are supporting our colleagues with a holistic package that includes severance, health care, emotional and well-being support, career counseling, and learning and development opportunities,” said the spokesperson. “We continue to make strategic investments for the future of our business and to deliver with quality and excellence in FY23 and beyond. In these moments, we lead with our values and are focused on supporting all of our colleagues.”
He noted that the firm pulled a variety of levers to manage costs and expenses, including slowing its hiring, reducing travel and expenses, and transferring some advisory professionals to roles in audit and tax. KPMG has also initiated surge staffing to be more nimble.
The firm, like others, has been hit by a slowdown in some sectors, including consulting on mergers and acquisitions. The FT noted that another Big Four firm, Ernst & Young, did not offer holiday bonuses at the end of last year to its employees, and job postings at the Big Four are 50% lower than a year ago, citing figures from the research firm William Blair. EY has also made plans globally to spin off its consulting side as a separate publicly traded company, and a vote by partners is expected in April.
