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.
