Stock photo of KPMG office in London. Look, the logo is the same ok.
Update 8.18.23: reports of layoffs in advisory (and memes about them) began trickling out on social media this week. We confirmed with KPMG that these layoffs are the last batch of people let go as part of the 5% reduction in force reported here in June and referenced in KPMG Chair and CEO Paul Knopp’s email to staff at that time included below (“Those impacted in Advisory and the other process groups will be notified later this summer.”) TL;DR People at KPMG did get laid off this week, these people are included in the 5% RIF announced in June of this year.
Rumors have been buzzing for a few weeks now that KPMG would be making some cuts, the most notable of these buzzes an extra buzzy post on Reddit suggesting an incoming RIF. This morning (Monday), all-hands calls started appearing in people’s calendars and, well, you know what happens after that.
For a few weeks now we’ve been hearing from various tipsters that the firm has been encouraging voluntarily resignations, here’s one tip we got on that earlier this month:
KPMG has been lopping off more and more heads this year, but with the current batch, they have far limited the incentives. Seasoned employees are only being offered a maximum of 12 weeks severance. Just a year ago, some directors and associate directors were getting many months of compensation.
KPMG is frantically trying to convince people in all service lines, and in many back-office functions, to take a quick buy-out before June 30. Almost nobody is taking the bait, due to the dismal terms of these agreements for all but the most senior people. so, expect a bloodbath on July 1st.
*checks watch*
We can now tell you that KPMG is reducing its workforce by approximately 5%. Staff found out at noon today via all-hands calls for each service line.
KPMG was the first US Big 4 firm to announce layoffs earlier this year, 700 or so people in advisory. Since then, Deloitte let go of about 1,200 people and EY 3,000, though EY’s was related not only to market conditions but that whole Everest thing costing the firm hundreds of millions of dollars.
This is a developing story, if more details come in we’ll update the story [Ed. note: we have below]. Anyone with more information and/or gory details is welcome to reach out by email or through our tipline at 202-505-8885.
Statement from the firm coming soon.
Update: A KPMG spokesperson issued this statement:
“We remain confident in our growth prospects as we continue to compete and win in the marketplace. Economic headwinds, coupled with historically low attrition, led us to this decision. We do not take this decision lightly. However, we believe it is in the best long-term interest of our firm and will position us for continued success into the future.
“We are focused on supporting our impacted colleagues with severance, access to healthcare and well-being benefits, and career transition services.
“We will continue to strategically invest, focus on quality, deliver excellent services and solutions, and innovate for the future.”
Update #2: Here is the email to KPMGers from Chair and CEO Paul Knopp today. We’re bumping it up above the service line email that followed (Audit’s is below) as this email was sent out first.
Today, I’m sharing difficult news about a decision we have made to reduce our U.S. workforce by approximately 5 percent. I do not take this decision lightly. We have reached this conclusion after already taking other measures and following considerable deliberation and deep reflection on our firm’s Values.
I regret that the workforce reduction is necessary and want to provide you with the context for it.
Over the past few years, we’ve achieved strong growth, and we set an ambitious FY23 plan to capitalize on the demand for our services and solutions.
While our pipeline of opportunities is strong and we continue to win in the marketplace, we are experiencing economic headwinds that are not unique to our business or firm. Additionally, we planned for a level of attrition that has not materialized. These economic headwinds, coupled with historically low attrition, translate into a significant mismatch between the size of our workforce and the measure of resources that will be needed to deliver services in the coming year. The workforce reduction is designed to address that mismatch.
I do not underestimate the impact this decision has on the lives of our colleagues and friends. We aim to impact as few people as possible as we align the appropriate complement of resources and skills with our business priorities to continue to compete, win and grow in the market. As difficult as this decision is, I believe it is in the best long-term interest of our firm and will position us for continued success into the future.
I’ve asked each Vice Chair to host an all-hands meeting today to share more about the business-specific dynamics and timing of notifications in their groups. I want you to know that those impacted in Audit, Tax and Digital Nexus will be notified today. Those impacted in Advisory and the other process groups will be notified later this summer.
To our colleagues who are impacted: Thank you for everything you have done to support our clients, communities and firm. We are truly grateful and wish you the best. We will support you with empathy and resources to help in this transition.
Our purpose and Values guide our actions during these difficult times. We will treat our departing colleagues with the compassion and respect they deserve as alumni of the firm. They will receive severance, access to extended health and well-being benefits, and career transition services.
I am confident in our business and the opportunities that are in front of us. As we move forward, we will continue to invest in the future and, as always, lead with our Values and strong culture.
Thank you for everything you do.
Paul
Update #2 #3: GC was provided a copy of the email that went out to everyone in audit from their vice chair Scott Flynn today. It is transcribed in its entirety below (thanks, tipster):
As I shared on our Audit All-Hands, and as Paul Knopp shared earlier in his firmwide message, we have made the decision to reduce our U.S. workforce. We have reached the conclusion after considerable deliberation, having already taken other measures, and with deep reflection on our firm’s Values.
Over the past few years, we’ve achieved strong growth and we set an ambitious FY23 plan to capitalize on the demand for our services and solution. While our pipeline of opportunities is strong, and we continue to win in the marketplace, we are experiencing economic headwinds, coupled with historically low attrition, which translated into a significant mismatch between the size of our workforce and the measure of resources that will be needed to deliver services in the coming year.
Those impacted in Audit, Tax and Digital Nexus will be notified today, and those impacted in Advisory, functional BPG — including Audit BPG professionals — and the other process groups will be notified later this summer.
All impacted individuals in Audit will receive a meeting invitation and email with additional information from Talent and Culture within the next hour.
Our purpose and values guide our actions during these difficult times. We will treat our departing colleagues with compassion and respect. They will receive severance, access to extended health and well-being benefits and career transition services.
I am confident in our business and the opportunities that are in front of us. My ask of you — our partners, professionals, colleagues, and friends — is that you are sensitive to actions taking place in our group and across the firm and that you support each other during this difficult process.
We learned nothing from 2020.
Amen and amen,
Amen
“strong pipeline”
And in about 7 months, the geniuses at leadership will be shelling out 30% more to hire these people back.
“All impacted individuals in Audit will receive a meeting invitation and email with additional information from Talent and Culture within the next hour.”
Now that’s how you do it. Not announcing layoffs and then saying people will find out if they’re affected within the next 6 months.
Yeah think again, they’re only telling Audit, Tax, IT today. Advisory and all other business support services later in the summer.
But then there is this part – “Those impacted in Advisory and the other process groups will be notified later this summer.”
KPMG has historically cut the fastest and deepest, which left them in the worst position when the market turned around. Back in 2008-2010, they did exactly that – and were left flatfooted when things picked up sooner than expected. As an ex-KPMGer, it’s kind of sad, but as a current Partner in another Big 4, it’s a great opportunity for me to pick up good people – either those who were cut or others who are now feeling insecure. Thanks, Uncle Peat!
Aren’t the other big4 firms also cutting? You have to wonder why it’s these 5% being cut and what you’re hiring. They’re not cutting their best and brightest
Supposedly they cut some people with 95% utilization, those people tend to be safe when the firm gets out the layoff spreadsheet and starts cutting. r/big4 thread: https://www.reddit.com/r/Big4/comments/14k3me7/how_the_fuc_did_kpmg_choose_who_got_laid_off_today/
Tell that to the people that are victimized by forced performance rankings and metrics like they did 11 years ago. Such BS. They put a target on your back at performance time, keep you around and bill you out just fine at 300 and 400 an hour and when shit gets real and it affects PPI they take dead aim.
No, they are cutting those close to the Big 6-0 and a smattering of others just so it doesn’t look that blatant….. same as 2020 when I was let go from KPMG
Guess you were let go then!
“We will support you with empathy.”
“Hey landlord, can I pay you in empathy?”
The Firm should let go PK. Removing PK from the equation would lead to improvements, and the overall situation would likely become more favorable for KPMG. By doing so, PK would be able to dedicate his attention solely to his core competency, which happens to be golf.
Throw Newinski in there too! Firm has gone downhill since these two took over. Let’s not forget their AT&T comrades. They talk a good game about employees and their careers, while dropping the axe! How many were actually hit yesterday and why did they tell some yesterday, but are waiting until end of summer for all other teams? Total BS in my book!
They told some (Advisory) yesterday that they will get impacted in August, with the hope that many individuals will voluntarily leave the firm, thus saving KPMG from having to provide them with severance pay.
It’s Advisory. Full stop. Their forecasting is ridiculous. And they bring in the most revenue and have the most people. So when their forecasting is off, it has a disproportionate impact on the firm.
Big 4’s product is their people. It’s not like we’re making soda pop and the demand drops and we cut back production, have a bunch of corn syrup laying around, and lower prices on the shelves. Those are much more manageable supply/demand issues. Managing supply/demand at Big 4 is a much more complex game. With the growth of the contractor sector, they should be erring on the side of being short staffed because they can easily go out and get contractors. The bigger risk is being overstaffed IMO.
CEO is from Audit. COO is from Tax. So buck has to stop with Advisory leadership. Also, I’m sure the banks that went under didn’t help Audit revenue either since they were all KPMG clients.
What makes me nervous is we aren’t even in a bad economy. If they need to cut this much in this economy it gets me really nervous what a real downturn would do. Although sometimes that triggers M&A activity which brings in a lot of Advisory business.
Lastly, it’s all about what the partners are willing to absorb and what leadership is willing to ask them to absorb. In the end, there are no investors to impress, it’s a partnership.
This all boils down to partner greed. It is highly immoral and despicable to stress people out for months in hopes that their lob uncertainty makes them quit. I truly hope that they never recover from this and their reputation is ruined. Enough of abusing people and extracting every ounce of productivity out of them for below market wages only to cast them by the wayside the moment the partners want more. It’s sick…
you get it
I know of 2023 grads in Atlanta who are getting their start dates delayed until 1/2024 and even fall 2024. They are getting paid $30K to delay and stay committed and the firm is going to pay for things for them to “better themselves” – take yoga certification class? Covered by the firm.
Senior leadership of this firm is ridiculous… layoffs/hiring bonuses/layoffs… supposed experienced business advisors can’t even run their own business properly! No long term plan, half ass voluntary severance plans that weren’t going to entice anyone, and now some ppl have to wait with uncertainty until the end of the summer – how’s that for KPMG ‘values’. So ready for these two schmucks (Paul & Laura) to take their cushy board seats and move on… third round of layoffs in less than 36 months. Then scratch their heads when the best campus hires don’t want to bother with Big Four accounting and 70-80 hour work weeks…
“pipeline of opportunities is strong, and we continue to win in the marketplace” – tired of the continual lies.
“nObOdy wAnTs tO bE aN AcCoUnT”. Long work hours, relatively low pay for the workload, layoffs after putting all the hours from busy season. No wonder there’s an accountant shortage.
See no difference between the mafia families and the big 4. Maybe just one; there were/are 5 mafia families. As far as operations, recruiting and having government official on the payroll (legally), etc, they are really the same. Mafia family at least valued loyalty and integrity (whatever way they defined it). All big 4 have their listing of values but similar to the Animal Farm 7 commandments, they only apply to some and not all. Everyone is equal at big 4; but people with connection and belonging to certain groups are more equal.
But but but…what about the Fortune List of 100 Best Employer to Work For? Laughable. Just laughable
Partners are next…
I hope and pray you are right. In KPMG, often individuals who are Managers and below bear the brunt of reductions, while those in higher positions, such as Directors and above remain untouched, despite their responsibility for meeting quotas that they consistently fail to achieve. It is disheartening that they not only retain their jobs but also receive generous salary packages. One such example is MM in HCA who is responsible for L&D.
Early retirement deal just offered to partners this week…