KPMG has become the first among the world’s four biggest accountancy firms to slash jobs in the US. Reports show KPMG is cutting close to 2% of its workforce in the US. The development comes amid a turbulent macroeconomic outlook. The darkening economic backdrop has pressured consumers and soured demand in several industries — including several financial firms, wall street banks, asset managers and big tech companies that have slashed jobs in the recent months.
According to a Financial Times report, the job cuts at KPMG will impact close to 700 employees. The report also showed that KPMG has been experiencing difficulties as a result of a decline in merger and acquisition (M&A) activity, which has negatively impacted its deal advisory business and decreased demand for I-T and strategic consulting, along with the other Big Four firms EY, Deloitte, and PricewaterhouseCoopers (PwC).
In an emailed response to Reuters, a spokesperson for KPMG said, “Our business and outlook remain strong. However, we have experienced prolonged uncertainty affecting certain parts of our Advisory business that drove outsized growth in recent years.”
According to the FT, KPMG tried to reduce costs by delaying the start date for new hiring, cutting travel expenses, and moving a number of advisory staff members to the audit and tax divisions of the company.
Media reports also show that many businesses over hired during the COVID-19 pandemic in the mistaken belief that the need for I-T consulting and deal advising work would remain the same.
KPMG stated that they have seen protracted uncertainty affecting certain aspects of their advising business that fuelled outsized growth in recent years. The consulting firm also mentioned how tough the activities were and how they affected people’s lives.
According to the company, it is offering its employees a comprehensive benefits package that includes severance pay, health insurance, assistance for their mental health and wellbeing, career counselling, and possibilities for learning and growth.
The wave of mass layoffs that began with startups and internet companies in 2022 has since spread to a number of other industries, including the financial sector, which has recently reduced workforce.
Big Tech companies have reduced nearly 60,000 jobs last month alone, cutting back on the hiring spree which surged during the pandemic.
After a decade of explosive growth, Silicon Valley pivoted to a cost-cutting mode.
WATCH | KPMG to cut 2% staff in US, several financial firms slash jobs
Last year, the tech industry saw a record high of 1 in 4 layoffs, with the largest companies announcing further cuts in 2023.
Facebook owner Meta has termed 2023 as the “year of efficiency”, reflecting the mood among large companies towards having a leaner organisation to lower costs.
After Facebook CEO Mark Zuckerberg dubbed 2023 as the “Year of Efficiency”, the social media giant eliminated hundreds of staff and reduced expenditure plans.
Separately, last week, The Financial Times reported that Meta had put off finalising the budgets for several teams because it was getting ready to cut more jobs.
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