October 31, 2020

Layoff Watch ’20: It’s Pink Slip Day at KPMG

[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.

Related articles:

Layoff Watch ’20: Some KPMG IT Folks Were Told Their Services Are No Longer Needed
Layoff Watch ’20: About 40 People In KPMG’s Marketing Department Got Some Bad News to Start the Week
Layoff Watch ’20: KPMG Executive Assistants Were Given an Ultimatum This Week

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67 Comments

    1. What does this mean? Are they going to lay off more people? This is not the time to play smart in an accounting website with statements such as this.

    2. I can confirm with 100% accuracy that this Sept-30 layoffs are THIRD wave of layoffs at KPMG this year. THIRD.
      About half of the positions are merged or purged.
      Remaining half went to TCS.(Tata Consulting).
      By 2022, most of the onsite TCS positions will be offshore.(This came from a TCS insider who is a proven transition leader)

  1. What is KPMG? If you’re writing an article at least who or what the article is about. Again, what is KPMG???? To me fool…KPMG means Kaiser Permanente Medical Group.

    1. The official name of this Big 4 firm is KPMG. If you don’t know this why are you on an accounting site?

    2. How did you even find this article, Nancy?

      Maybe the article title is fine, and you are just ignorant? Every result returned by Google is relevant to the audit firm.

    3. This is an accountancy website. If you’re interested in accountancy and you don’t know who KPMG are you need to take a look at yourself not blame the rest of the world. If you’re on here and not into accountancy then you’re best off doing one. Off you go…

  2. They should have just said layoffs were based on individual poor performance. How would anyone ever prove them wrong?

    1. Keep your head up. I had the initial shock phase then the anger set in after seeing they let go of mostly senior associates and managers who do the same work (in my group at least) and are clearly on lower salaries than director and associate directors. My reviews have been top notch so that wasn’t an issue. If you’re not part of the club, you were let go.

      1. People who were laid off were mostly directors and low performers in my group (subset of advisory) so it differs from group to group.

      2. Which part of US are you located?? Doesn’t have to be a specific city but area of US if you don’t mind sharing….

    1. @JasonBramwell, when did you let the russian hackers into GC?
      Anyela, If you are confused about this notice, I bet you are confused about a lot of other things. Good luck to ya.

    1. Many partners took the early retirement offer. There were many announcements from July to Sept of partners retiring end of fiscal year. The layoffs that happened on Tuesday 9/29, its only been senior associates and managers from my group which includes me.

  3. “We are leading with our values and showing empathy toward all of our colleagues”….. I’d love to know what their values are….If they have anything to do with decency and humanity they should have just cut everybody (above a certain level) comp by 5%. They could have achieved their cost objectives and avoided disrupting people’s lives during a major pandemic,but hey, that course of action could have conflicted with their values.

    1. Perhaps the virtual reality of things has changed the model. You can now allocate resources more efficiently cross offices, whereas before it was individuals primarily working on projects in their home office. Same applies to the admins. So to cut to the chase, firms may not need as many bodies if they can manage their resources effectively on a national level. Sucks and hurts people in the near term, but it’s a prudent decision imo for the long term. Keeping people on and cutting high performers salaries also isn’t really a great alternative to boost morale…

      1. Don’t kid yourself; those admins are MORE essential now that meetings — especially sales pitches — are being run virtually, across multiple technology tools, with many more moving parts that can go wrong. They’re just mostly women (and women of color) whose age and education level makes privileged white partners think they aren’t valuable.

        1. I’m not saying they’re not essential did I? I stated that there’s now a potential to be more efficient than ever before. Let’s be honest, who hasn’t hoteled in nearby a group of admins? Hard not to listen in since they talk, gossip, and complain all day.

    2. I’d have zero interest in taking a pay cut so that these people could keep their jobs. I know that people KPMG have ALREADY taken cuts to pay and benefits.

      This isn’t a massive 20% layoff, these are small numbers for how large KPMG is. These are the low performers that got laid off.

      1. KPMGer: I would bet that they were not poor performers, just not Yes Men. And as far as not interested in taking a pay cut to help out your fellow employee; karma will win out eventually.

    3. lol their values (or I guess business model) is working kids out of college 80 hours a week to drive profits.

  4. I am an EA still waiting to see if the Layoff Fairy visits in a few weeks. These are very sad and difficult times for all.

    And for the person who had know idea what KPMG stands for, it stands for Klynveld Peat Marwick Goerdeler. In the old days, the original Peat Markwick. (Uncle Pete’s firm).

  5. Canada seems to be doing okay in all of this. Seems like it’s been mostly US that the layoffs are happening.

  6. I was a KPMG partner and left several years ago for a top 15 firm. Could not have made a better decision! Best firm in the world. If someone on this thread was part of the layoff today there are other firms out there which can actually be even more rewarding. Don’t give up.

  7. This is such a short-sighted decision on KPMG’s part. It takes years to pull in that many experienced staff members and train them. At a time when industry is hungry for talent and willing to pay for it, these thousands of people are going to disappear from the public ranks and make the shortages of experienced staff even worse. In a time of historic staffing shortages, now is not the time to lay people off unless you expect your business to just dry up and not come back. Ie, don’t make long term staffing decisions based on a (relatively) short term economic situation.

    Of course, that would require some actual sacrifice from the partners. We can’t have that, can we?

    1. KPMG (US) partners did take a pay cut early in the pandemic. That was in the first wave of cuts made by the firm. The RIF was after the first set of cost cuts, like KPMG partner compensation reduction, no merit increases, hiring freezes, no variable compensation, no monetary encore awards, and other later cost cuts, like 401k match reduction and offering early retirement to partners, and they communicated there may be layoffs throughout the pandemic as well. Budgets also probably had some level of attrition planned and that may not have happened either. No company wants to do a RIF or let go of team members – this was done after they pulled a lot of levers already.

    2. Before people attack me I’m not a partner and I’m NOT defending KPMG in any way, shape, or form. Like “Former KPMG Partner” says, I cannot wait to move on from KPMG — worst job I have ever had.

      But this post really doesn’t make a lot of sense:

      > don’t make long term staffing decisions based on a (relatively)
      > short term economic situation

      1. People have been riding the bench for 6 months now while partners have taken a pay cut. How long would you expect any firm, just not KPMG, to collect a full salary for doing nothing? More than 6 months?

      2. The numbers were ~4% of the workforce. That’s likely the number from planned attrition over the year which wasn’t met because when the job market dried up, people stopped leaving the Firm.

  8. KPMG’er safe for now but feeling angry for my colleagues who were let go for no rhyme or reason. I’m wondering if anyone on here that was impacted was told WHY they were chosen and not someone else? I feel they at least owe you what went into the decision making process. Good luck to all.

  9. And yet Mickelson will continue to make 10 million a year (that’s 100 $100,000/year jobs) and he has been on their payroll for the last 12 years and hasn’t played on the weekend for years . Do the math

  10. I want to comment here since comments are closed on the story about the EA’s, and since I think this is probably somewhat applicable to this story as well. This week is KPMG’s PGA Women’s Championship. All KPMG ever talks about is promoting women, they have WAB and KNOW. Now, think about how many EA’s are women at the firm? More thank 50%, 60% or maybe 80%? How can they say they support women and stand behind promoting women in the workplace? And how many of those who lost their jobs (this story) are women? Does anyone have that percentage? The fact that Lynn led the firm for five years does not mean they are all for women, because they are not. It’s just another bunch of their BS!

  11. Another EA All Hands call scheduled for tomorrow which will determine the fate of the EAs in the firm
    Stay tuned

  12. As I mentioned in previous post EA call today. Those impacted received an email immediately after the call. Their finger was already on the trigger.
    Glad to be gone

    1. Do you know how many total were let go? Any specific office or business unit impacted more? Sorry this happened to you.

Comments are closed.

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