KPMG is set to cut approximately 140 audit partners in the United States, representing about 10 percent of its 1,400-strong US audit partner pool. This move follows a similar redundancy round in the UK last month, where the firm eliminated around 600 jobs.
Details of the Job Cuts
The US layoffs are part of a multiyear strategy to align the size, shape, and skills of the team with the power of the audit platform, according to a firm spokesperson. The cuts come as KPMG, one of the Big Four accounting firms, faces profitability pressures after a period of post-pandemic stagnation.
UK Redundancies
In the UK, KPMG cut approximately 440 assistant manager roles in its audit business and around 120 roles in its advisory arm. The advisory business saw a 3 percent decrease in fees over the last financial year. Additionally, the UK arm has begun demoting senior equity partners to lower-status salaried partner roles, a strategic move to reduce the equity partner headcount.
Equity Partner Challenges
Equity partners at KPMG UK, the smallest of the Big Four, earn an average of £800,000 annually. However, the firm has been inviting them to career conversations to encourage voluntary demotion. Over the years, KPMG has expanded its salaried partnership layer to retain senior talent without diluting equity profit pools.
Broader Context
The Big Four firms have conducted several rounds of redundancies as they navigate significant profitability pressures. The equity level has been particularly tough to cut, but KPMG's recent actions signal a shift toward a leaner partnership structure.
