KPMG cuts staff and freezes wages as deals market slows
Amid a challenging economic backdrop and a slump in the deals market, KPMG has announced it is instituting new austerity measures within its UK operations.
The firm is set to slash around 110 positions in its deal advisory department, constituting approximately 7% of the sector’s nearly 1,700 personnel. These imminent redundancies, targeting a sector that forms a critical component of KPMG’s offerings, follow an earlier purge that saw 125 consultancy roles, or 2.3% of the firm’s consultants, eliminated.
The firm, employing roughly 17,000 individuals across various practices, has declared these layoffs a reluctant but necessary move. Prior to this, efforts were made to mitigate job losses by redistributing staff to busier divisions. Additionally, deal advisory staff face a pay freeze this year, deviating from the customary annual salary increments prevalent in big four accounting firms. Moreover, KPMG’s staff brace for a contracted bonus pool compared to the previous year, signalling tightened financial belts across the board.
This trend isn’t exclusive to KPMG; rivals like Deloitte and EY are also paring down their UK staff, with 800 and 150 positions being culled, respectively. Comparatively, the US wings of these big four firms have witnessed even more significant workforce reductions, the FT reports.
A KPMG spokesperson said: “A challenging economic environment has driven a softening in a number of markets, including the deals market. These conditions have impacted demand in certain areas, as some clients have chosen to pause or delay projects.”
“We have therefore taken the difficult decision to put forward proposals to reduce our headcount in a small number of areas of our business. Our people are at the heart of our firm and our priority is to support them throughout this consultation.”
These developments come in the wake of a record £21 million fine levied on KPMG for its auditing lapses related to the Carillion debacle.