KPMG US lays off 700 employees in advisory business

KPMG was the first US Big Four firm to cut jobs amid a weaker economy and reduced demand for consulting services – laying off 700 people in its advisory wing.

The cuts, which were announced Wednesday in an internal memo, affect nearly 2% of KPMG US’ workforce. None of the layoffs were partners.

Carl Carande, vice-chair of the US advisory business, said in the memo the staff reductions were required to “better align our workforce with current and anticipated demand in the market.”

The statement echoed KPMG’s rationale for layoffs in September 2020 following the shock Covid-19 pandemic downturn. The firm cut 4% of its workforce (1,400 of its 35,000 people), with a spokesperson noting the company was “taking prudent action to better align our resources with client needs and demand.”

The pandemic cuts, however, affected all three of its audit, tax, and consulting business lines. KPMG’s Big Four peers also trimmed their workforce, with Deloitte laying off 5% of its employees.

Shortly thereafter, the Big Four went on a hiring spree to meet surging demand for transaction advisory, strategy consulting, and IT consulting. All three areas, however, have seen an easing in demand in recent months.

KPMG’s US headcount rose by over 2,000 people to 35,266 by the end of 2021 – making back its layoffs and then some – according to data from equity research firm William Blair.

The accounting and consulting firm attempted to stave off layoffs by delaying start dates for new hires, cutting travel budgets, and transferring some advisory staff to the audit and tax businesses. Those efforts were ultimately not enough to solve an extended demand reduction.

“These actions are incredibly difficult and impact people’s lives,” Carande said in the memo. “We are supporting our colleagues with a holistic package that includes severance, healthcare, emotional and well-being support, career counseling, and learning and development opportunities.”