[Updated on Sept. 30 with additional information.]
Two days before the start of KPMG’s 2021 fiscal year, massive layoffs unfortunately occurred at the firm on Tuesday. We received confirmation that 1,400 people, less than 4% of KPMG’s workforce, would be notified this afternoon that they no longer have a job with the firm.
In a statement to Going Concern, KPMG said:
“The firm has proactively managed through the pandemic and economic downturn by reducing our operating costs, prioritizing investments, and positioning ourselves for the future. While our business fundamentals are strong and we continue to be optimistic about the future, we must also be realistic about the uncertainty that exists in the marketplace. For that reason, we are taking prudent action to better align our resources with client needs and demand. These are incredibly difficult decisions that impact people’s lives. We are leading with our values and showing empathy toward all of our colleagues as we continue to deliver with quality and excellence in FY21 and beyond.”
Heads of each service line at KPMG had a mandatory call with employees at 12:30 p.m. ET when the bad news was delivered.
Here’s how many people are being let go by service line, according to sources:
- Advisory: 396
- Audit: 189
- Tax: 194 (another source said 4% of headcount)
In addition, we were told that 125 KPMGers in tax have to take a comp reduction.
The other 620 or so employees who are being laid off are non-client-facing employees, sources say.
A KPMGer in advisory told us that the firm mentioned severance and placement services but provided no other details.
According to sources, all affected employees would have received a calendar invite for a meeting with an office leader and HR within two hours of the call’s completion, so those impacted would have received the bad news earlier this afternoon.
We’ll update this article as we receive more information. Good luck to all those affected.
[UPDATE] A senior associate in advisory who was among the nearly 400 people in that practice laid off on Tuesday confirmed what was posted on Fishbowl yesterday about severance. A person who identified themselves as a KPMG employee posted on Fishbowl “severance is four weeks pay (or more depending on length of service, PTO pay out) and then the offer to take 10% of base pay if you sign an NDA.”
The senior associate, whose last day with KPMG is Oct. 16, told us:
I was given a severance of 4 weeks. (One week for each full service year for everyone under SM/Director level) Accrued PTO will be paid out.
On the FAQ document I was sent, it mentions:
“You will receive severance, in the amount indicated in your notification letter, regardless of whether you sign a release or not. The firm has also indicated that it will offer you an enhanced separation package including access to COBRA at the employee rate for up to 18 months, and a bonus equivalent to 10% of your base compensation, if you elect to sign a release agreement. The release agreement will be provided to you separately prior to your last day, and will outline the time within you must execute the agreement if you choose to do so.”
So far, I have not been provided this release agreement so I cannot comment on the terms.I will also add that I was not on the bench and was fully staffed on a client project/chargeable.
We’ll continue to update this article as we receive more information.
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