Big Four carnage as KPMG swings the jobs axe on both sides of the Pond
On the back of KPMG taking the shears to its partners’ headcount in the UK, around 140 audit partners across the Atlantic are now set to lose their jobs.
The Big Four firm is set to cut about 10 per cent of its 1,400 US audit partners to reduce its bloated headcount.
The move comes after its sister arm in the UK conducted another redundancy round last month, cutting around 600 jobs.
The UK arm axed about 440 ‘assistant manager’ roles in the firm’s audit business, along with around 120 roles in its advisory arm. This followed its advisory business seeing a 3 per cent decrease in fees over the last financial year.
The latest headcount cut in the US, first reported by the FT, was credited to “a multiyear strategy to align the size, shape and skills of our team to the power of our audit platform to best serve our clients and protect the capital markets.”
Equity headcount problem
In addition to cuts last month in the UK, KPMG has also begun demoting UK senior equity partners, members who hold a stake in the firm and share its profits, and instead offering them lower-status salaried partner roles.
Equity partners at KPMG UK, the smallest of the Big Four, bring home an average of £800,000 each year.
However, those partners have reportedly been inviting them to “career conversations” as a strategic move to slash the equity partner headcount.
The Big Four firms have made several rounds of redundancies over the years as they are experiencing significant profitability pressures following a shift from post-pandemic growth to stagnation.
The area where it has been tougher to cut is at the equity level.
But over the last few years, the Big Four giant has increasingly expanded its ‘salaried’ partnership layer, rather than ‘equity’, to retain senior talent without diluting equity profit pools.