KPMG LLP has announced a reduction of approximately 330 positions in its US audit division, representing about 4% of its nearly 9,000 audit employees.
The decision, driven by historically low employee turnover, aims to align the size, shape, and skills of the workforce with current market conditions.
KPMG Layoffs: Reasons, Impact and Reactions
The layoffs come as a response to overstaffing caused by near historic low turnover rates.
KPMG’s audit division has faced challenges in managing staffing levels due to employees refusing to resign voluntarily.
The firm emphasized that these actions are necessary to address continued low levels of attrition and ensure the workforce is appropriately sized for the market.
Despite the job cuts, KPMG’s audit business continues to grow, generating $3.7 billion in revenue in 2023.
The layoffs are part of a broader trend among the Big Four accounting firms, which have been adjusting their workforce in response to shifting client demands and economic headwinds.
KPMG had previously announced job cuts in its deal advisory business in the UK and a 5% reduction in its US operations in June 2023.
Employees affected by the layoffs learned of the decision last week, with the cuts targeting associate and manager-level positions.
Partners remain unaffected by the reductions. The layoffs have sparked concerns among employees about job security and the firm’s future staffing strategies.
Company’s Response
KPMG is not alone in facing these staffing challenges.
Competitors such as PwC, Deloitte, and Ernst & Young have also implemented workforce reductions in response to weaker demand for deal advisory services and pricing pressures.
The integration of AI and technology into audit practices is expected to reshape the workforce, potentially reducing the number of traditional audit roles.
KPMG’s leadership has emphasized the importance of aligning the workforce with market conditions and addressing low attrition rates.
CEO Paul Knopp has called for reforming CPA licensing requirements to counter a shrinking pipeline of qualified accountants, highlighting the broader talent shortage in the accounting industry.
The job cuts at KPMG reflect the firm’s ongoing efforts to adapt to changing market conditions and manage staffing levels effectively.
While the layoffs are a challenging development for affected employees, they are part of a broader strategy to ensure the firm’s long-term sustainability and growth.
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