- KPMG, one of the Big 4 accounting firms, laid off 1,400 of its 35,000 US employees Tuesday.
- The layoff includes 779 tax, audit and advisory employees, the firm confirmed, and additional staff in business process groups, according to a source familiar with the matter.
- The firm has also cut pay for 125 tax employees.
- KPMG is the latest professional services firm to cut pay and lay off staff due to the coronavirus's impact on the economy.
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KPMG, one of the largest professional services firms and a Big 4 accounting firm, cut 1,400 employees from its 35,000-member US workforce on Tuesday, Business Insider has learned.
A firm spokesperson confirmed to Business Insider that it is laying off 194 tax employees, 189 audit employees, and 396 advisory employees from its US operations. It also cut pay for 125 remaining tax employees.
"While our business fundamentals are strong and we continue to be optimistic about the future, we must also be realistic about the uncertainty that exists in the marketplace. For that reason, we are taking prudent action to better align our resources with client needs and demand," the spokesperson said in a statement.
In addition to the 779 tax, audit, and advisory employees affected, KPMG laid off 621 employees from its US business process groups, according to a source familiar with the matter. The laid-off employees will work through to mid-October, the source added.
In all, the cuts are affecting about 4% of KPMG's US workforce.
KPMG is the latest professional services firm to lay off employees or cut pay as the coronavirus pandemic has affected the economy and caused clients to reign in spending on consulting and advisory work. Accenture, one of the largest consulting firms, said it was cutting 5% of its US workforce this year as part of a 5% global workforce reduction, Business Insider previously reported, while Deloitte, EY and PwC have cut jobs abroad, according to Reuters.
Big 4 firms have also delayed the start dates for business school graduates and are hiring fewer MBA grads this fall.
Even so, professional services firms express optimism that consulting work, which has taken the biggest hit due to the pandemic, will make a quick recovery. Accenture's CFO said in an earnings call that she expected the firm's consulting practice to be back to pre-pandemic levels by the middle of next year, while the KPMG spokesperson said the firm plans to "continue to deliver with quality and excellence."
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