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KPMG To Slash 5% Of US Workforce Due To Slow Service Demand



KPMG To Slash 5% Of US Workforce Due To Slow Service Demand

(CTN News) – The management consulting firm KPMG is cutting 5 percent of its workforce in the US, the second round of cuts it has made this year as it struggles to cope with the slowdown in demand for consulting services and other services.

It was the first of the Big Four firms to ax staff in February and the company said in an email to staff seen by the Financial Times that the continued “economic headwinds” meant that further reductions would be necessary in the near future.

As opposed to the 2.5% cut announced in February, which only affected staff at KPMG’s advisory business, the larger reductions announced internal on Monday will affect all parts of KPMG, including its audit business as well.

There will be approximately 1,950 people affected by the decision, based on the 39000 people who work at KPMG.

KPMG US chief executive Paul Knopp wrote in an email to KPMG staff, “While our pipeline of opportunities is strong, and we continue to be successful in the marketplace, we are experiencing economic headwinds that are not unique to our business or to our firm.

In addition to the recent sharp decline in the number of employees leaving the firm voluntarily, Knopp said, KPMG is experiencing “a significant mismatch between the size of our workforce and the amount of resources that will be needed to deliver services to our clients over the next 12 months”.

As a result of several years of record-breaking hiring, US consulting firms have reduced their staffing numbers this year.A total of five percent of EY’s staff is being terminated, while Deloitte internally announced a reduction of one percent.

Accenture announced an 18-month programme of cuts totaling 2.6% of its workforce, while McKinsey announced a back-office restructuring that will reduce its workforce by up to 2,000.

Even though the consulting industry is continuing to grow overall, surveys indicate that there are pockets of the industry where demand has declined, including those related to mergers and acquisitions.

A recent Accenture report suggested that clients are rethinking small projects, and a Source Global Research report earlier this month suggested that fees are under increasing pressure.

Source Global found that more than three-quarters of professional services buyers had canceled or scrapped at least some of their existing projects, while more than two-thirds had paused most of their existing projects.

KPMG said the latest round of job cuts would take effect between now and September, the end of its financial year. The audit and tax practices will learn if they are affected on Monday, according to Knopp’s email, while advisory staff will find out later this summer.


As Wall Street Drifts In What Appears To Be A Quiet Week For The Market

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