KPMG cuts nearly 2% of US staff

Dive Brief:

New York-based KPMG U.S. is laying off nearly 700 staff in the advisory side of its business, or close to 2% of its total workforce, a source familiar with the matter told CFO Dive Thursday.
The accounting and consulting firm notified workers Wednesday, with the layoffs affecting employees at all levels of the company except for partners, the source said. While a surge of tech companies have announced layoffs in recent months, KPMG is the first Big Four firm to cut staff in the U.S. as the economy slows, The Financial Times reported Wednesday.
KPMG’s layoffs come amid broader weakness in the economy, and as certain parts of the firm’s advisory business, particularly related to tech and deal-making, are seeing “prolonged uncertainty,” the source said.

Dive Insight:

In recent months many big tech firms have announced large layoffs but staff cuts are starting to hit a wider range of industries. Last week The Walt Disney Company announced it was laying off 7,000 employees, or 3.6% of its workforce, as part of a restructuring plan to cut costs.

Many CFOs are still battling to hire certain talent at the same time that they are preparing for a possible recession.

At KPMG the firm’s advisory business drove outsized growth in recent years, according to a statement from KPMG emailed by spokesperson Russ Grote in response to questions about the layoffs. “We are taking prudent actions to match our resources to the needs of the market today,” he wrote.

With KPMG’s tax and audit businesses remaining strong, the firm has taken steps to move some of its employees from the advisory side to the accounting side, the source said. Indeed, the firm still has such a fierce appetite outside its advisory business for accountants that it is working hard to recruit talent from universities to keep that labor pipeline full, CFO Dive previously reported.

Grote wrote that the actions are difficult ones and noted that the firm is also taking steps to provide support to the affected staff.

“We are supporting our colleagues with a holistic package that includes severance, healthcare, emotional and well-being support, career counseling, and learning and development opportunities,” Grote wrote. “We continue to make strategic investments for the future of our business and to deliver with quality and excellence in FY23 and beyond.”