KPMG faces staff uproar as job cuts expose communication breakdown
Big Four audit firm KPMG is facing something of an internal comms meltdown, CityAM understands, amid complaints of a lack of communication during a ‘mismanaged’ redundancy round.
In late March, it was reported that KPMG UK was set to axe more than 500 staff in the latest redundancy round at the Big Four giant. Those affected include 440 assistant manager roles in the audit business (Grade D) and 120 roles across the advisory arm, which impacts roughly 6 per cent of the division’s 7,100 employees.
In auditing, assistant managers are relatively junior positions in which qualifications in accounting were secured three years ago, and, according to LinkedIn, a few in this position were only promoted six months ago.
For cuts in the audit section, the firm blamed the “current market conditions mean[ing] our attrition rates are very low within certain parts of our audit population, which is why we are proposing to right size those areas.”
While for its advisory department, the firm said at the time it blamed “the ongoing evolving market conditions” that meant roles would be reduced “following careful consideration.”
Now the firm is undergoing its consultation round on who will be handed a P45 and who will keep their job, as it currently “grades” the affected assistant manager cohort.
One source within the scope of the consultation told CityAM that there was initially a lack of internal communication about the cuts. “We only got [news of] the advisory side, so when the news came out that it was 600 jobs…oh, audit has been hit as well.” They added that KPMG “didn’t do like a firm‑wide email being like ‘this is what’s happening with the firm’.”
Another source stated that there has been a lot of “mismanagement,” adding: “one minute, there is an email saying the business is doing well; the next, there is an email saying people will be laid off.”
CityAM understands there is widespread frustration within the firm over how it is handling the round of job cuts.
A KPMG spokesperson said the firm “continues to support our people throughout the consultations.”
The big squeeze at the Big Four
In the firm’s most recent financial results, which were the first set of figures for the merged KPMG UK and Switzerland group, the firm saw a 5 per cent growth in its audit practice, which was driven by increased support for integrated AI platforms
However, its advisory group was down 3 per cent on the previous year due to a “difficult” global environment, which is having a knock-on effect on the consulting market.
KPMG is not the only firm where the economic slowdown and the rapid rise of AI are combining to play havoc with the traditional firm structure, especially in consulting, as pricing models are forcing clients to pull back amid businesses keeping an eye on external expenditure.
The Big Four have all been struggling with stagnant profits and ballooning headcount since the pandemic boom. As a result, there have been rounds of redundancies at each firm, with more expected to follow as economic headwinds show no sign of easing.