KPMG will launch fresh job cuts in the UK and freeze pay for its deal advisory staff as a subdued deals market and difficult economic environment hit demand for its services.
The redundancies in the deal advisory team were set to be announced during hastily convened calls on Tuesday morning and would affect about 110 people, close to 7 per cent of the nearly 1,700-strong UK deals business, according to people familiar with the matter.
KPMG had previously launched a targeted set of job cuts aimed at 2.3 per cent of its UK consultants – 125 positions. The firm, where partners earned an average of £717,000 (€825,000) last year, employs about 17,000 people in total across its audit, consulting, tax and deals practices.
The redundancy consultation was a last resort after other steps such as reallocating staff to divisions with more work, said a person familiar with the matter.
Staff were also set to be told that deal advisory teams would not receive pay rises this year. Employees at the Big Four accounting firms are given a salary increase most years.
KPMG employees had already been warned that this year’s bonus pool would be smaller than 12 months ago.
Rising costs and a dearth of deal-making have put pressure on large advisory firms. KPMG’s rival Deloitte is cutting 800 jobs in the UK, while EY is trimming 150 jobs in its financial services consulting business.
The Big Four firms’ US businesses have run much larger redundancy processes with several thousand staff affected.
KPMG 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.”
KPMG was last week fined a record £21 million and ordered to pay £5.3 million in costs for “textbook” failures in its auditing of the government outsourcer and construction group Carillion which collapsed in 2018. – Copyright The Financial Times Limited 2023
