As per a memo to staff cited by the Financial Times, The job cuts were announced internally on February 15 by Carl Carande, vice-chair of KPMG’s US advisory business as the firm needed to “better align our workforce with current and anticipated demand in the market,” as per a memo to staff cited by the Financial Times.
According to the report, like other Big Four firms — EY, Deloitte and PricewaterhouseCoopers (PwC) — KPMG has been struggling with the collapse in merger and acquisition activity which has had an adverse impact on its deal advisory business, and easing demand for IT and strategic consulting.
“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,” a KPMG spokesperson told Reuters.
The mass layoffs that started with tech firms, especially startups in 2022, have now been spilling over to several others including financial companies that slashed jobs in recent months. These include major Wall Street banks, asset managers and fintechs as they struggle to stave off macroeconomic challenges that have pressured consumers and soured demand in several mainstay business units.
The FT report claims KPMG had been trying to keep costs low by postponing the joining date for new hires, trimming travel budgets and transferring several consulting staff to the audit and tax sides of the business.
Several reports suggest this is also a result overhiring that many firms engaged in during the COVID-19 pandemic anticipating that the demand for IT consulting and deal advisory work would remain the same.
According to its most recent public report, KPMG’s US workforce rose by more than 2,000 to 35,266 at the end of 2021, which is comparatively less than its peers.
“We have experienced prolonged uncertainty affecting certain parts of our advisory business that drove outsized growth in recent years,” KPMG said, according to the report. It added that actions were incredibly difficult and impact people’s lives. The firm is supporting colleagues with a holistic package that includes severance, healthcare, emotional and wellbeing support, career counselling, and learning and development opportunities, it said.
Wealthy families in Singapore, Hong Kong into crypto investment : KPMG
Citing an internal announcement, the Financial Times reported on Wednesday that KPMG is laying off around 2% of its workforce in the United States, which makes it the first of the world’s four biggest accountancy firms to cut jobs in the country.
Several financial firms have slashed jobs in recent months including major Wall Street banks, asset managers and fintechs amid a turbulent macroeconomic environment that has pressured consumers and soured demand in several mainstay business units.
The layoffs at KPMG will impact approximately 700 people, the FT report stated. The cuts were announced internally on Wednesday by Carl Carande, vice-chair of KPMG’s US advisory business.
In an emailed statement 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.”
It is way too early to anticipate what the full and permanent effect of these layoffs will be on the H-1B programme and the Indian economy. If the prediction by the US tech industry on recession turns out to be correct, its effect will be huge.
The technology industry in the United States (US) is constricting. According to Layoff.fyi, more than a quarter million professionals have lost their jobs since the beginning of 2022, with 95,000 job losses occurring in 2023. This reduction has occurred across the US, especially among the tech giants. Among those slacked off are thousands — probably tens of thousands — of Indian Americans and Indian nationals working on H-1B visas.
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