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KPMG is cutting close to 600 UK jobs as the Big Four accountancy firm struggles to reduce costs amid a harsher market.
Staff were told on a hastily convened call on Friday morning that KPMG would axe about 440 assistant manager roles in the firm’s audit business, out of a total of 590 roles that are “at risk” within the division, according to people familiar with the matter.
The accounting and consulting firm separately told staff in its advisory arm that it will slash about 120 roles and consider hundreds more for possible redundancies, according to people familiar with those cuts.
Most of the advisory jobs lost would be in the enterprise risk department, which advises companies on governance, risk and compliance, although some back-office workers and staff in an economics team would also be affected, they added.
The redundancies underscore difficulties faced by professional services firms even after they carried out multiple rounds of cuts and cost-squeezing measures as demand for consulting services fell from pandemic-era highs.
The firms must also attempt to reassess client needs in an AI-driven environment and overhaul their own operations to adopt the technology.
KPMG in a statement blamed the need for audit cuts on low attrition rates.
“Current market conditions mean our attrition rates are very low within certain parts of our audit population, which is why we are proposing to right-size those areas,” the firm said. “This isn’t a decision we take lightly, and we will support our people throughout this consultation.”
“Last week was pretty devastating for everyone,” said one person familiar with the advisory cuts, adding that some people had experienced similar upheaval last year “and now are going through it again”.
A second person said senior KPMG leaders were cutting staff because they were concerned about meeting budgets given the prolonged slowdown.
“We’ve had a large bench for about six months and not much in the pipeline,” said the person, referring to consultants who are not assigned to a specific project. “We have also lost some fairly regular income projects,” they added.
Another person said the changes would impact just over 2 per cent of the advisory business.
KPMG’s cuts to audit jobs, which will be consulted on until mid-May, stand in contrast to previous Big Four redundancies that have typically focused on other roles because of the more steady nature of the audit business.
But low attrition rates have bloated the firms’ ranks of junior auditors and consultants. PwC cut 175 junior auditors last year.
One of the people familiar with the audit business added that low attrition was also partly caused by foreign employees with KPMG-sponsored visas who are unable to find sponsored jobs elsewhere.
KPMG employs about 16,700 people in the UK. While it does not disclose a breakdown of staff across its audit, advisory and tax businesses, its advisory arm accounts for close to half of annual sales.
The UK consulting market grew less than 4 per cent last year, according to figures from Source Global Research, though industry body Management Consultancies Association expects this to improve to about 6 per cent in 2026.
KPMG’s advisory business contracted 3 per cent last year — echoing revenue declines for the consulting arms of EY, PwC and Deloitte — even as overall profitability increased.
The firm’s UK partners were paid more than rivals at both PwC and EY last year for the first time in more than a decade, taking an average £880,000 for the 12 months to September, up 11 per cent on the previous year.
UK chief executive Jonathan Holt, who this month lost out in the race to become the firm’s next global boss, has boosted profits by cutting costs, freezing pay and promotions and reducing headcount.
He has also cut the number of equity partners sharing profits to the lowest level in two decades. The firm reported a 14 per cent increase in profit before tax to £576mn last year, reflecting “careful cost management in response to the economic cycle”.
KPMG confirmed it was “launching proposals to reduce roles in some areas” of its advisory business.
It added: “While the firm continues to experience growth in some areas, we are always looking at the shape of our business to stay in step with client demand and to support sustainable growth.”