KPMG became the first of the Big Four accountancy firms to respond to the weaker economy with systematic job reductions cutting close to 2 per cent of its staff in the US after a sharp slowdown in its consulting business.
According to the latest monthly survey by William Blair, the equity research firm, job postings by the Big Four are 50 per cent lower than a year ago.
The cuts, which will affect close to 700 people, Carl Carande, Vice-Chair of KPMG’s US advisory business, said.
They were needed to “better align our workforce with current and anticipated demand in the market,” he said in a memo to staff.
According to a Reuters report, like other Big Four firms, KPMG has been struggling with the collapse in merger and acquisition activity, which has hit its deal advisory business and easing demand for IT and strategic consulting.
KPMG had been trying to hold down costs by delaying the start date for new hires, cutting travel budgets and transferring some consulting staff to the audit and tax sides of the business.
“Despite these efforts, we continue to have more people than needed to meet current demand,” Carande wrote in the memo. The reductions are spread across the US and across the consulting business, but do not include any partners.
The problem of plenty for Big Four
The Big Four went on a hiring spree in the wake of the coronavirus pandemic, as demand for IT consulting and deal advisory work surged. While increasing less than its rivals, KPMG’s US headcount rose by more than 2,000 to 35,266 at the end of 2021, according to its most recent public report.
“We have experienced prolonged uncertainty affecting certain parts of our advisory business that drove outsized growth in recent years,” KPMG said.
“These actions are incredibly difficult and impact people’s lives. We are supporting our colleagues with a holistic package that includes severance, healthcare, emotional and wellbeing support, career counselling, and learning and development opportunities.”
The U.S. economy obliterated forecasts by adding more than 500,000 jobs in January — but try telling a tech worker that the unemployment rate is 3.4%. The technology industry has endured near-daily layoff announcements for months, and several other sectors are now seeing a stream of cutbacks as well.