KPMG to Cut About 10% of US Audit Partners After Voluntary Retirement Push Failed
Big Four accounting firm to reduce partnership size as part of multiyear restructuring strategy
Quick Look
- KPMG is cutting about 10% of its US audit partners after earlier efforts to encourage voluntary retirements did not deliver expected results.
- The decision was shared during an internal meeting, with several dozen partners expected to leave.
- The firm stated the move is part of a multiyear strategy to align the size, shape and skills of its team with its audit platform.
AI-generated summary
Why It Matters
KPMG is one of the Big Four accounting firms alongside Deloitte, EY and PwC. The firm's audit and assurance division includes around 1,400 partners and managing directors according to its latest transparency report. The partnership had grown larger than needed compared to current business levels.
KPMG has announced it will cut about 10% of its US audit partners after earlier efforts to encourage voluntary retirements did not deliver the expected results, according to a Financial Times report. The decision was shared during an internal meeting, where employees were told that the size of the audit partnership had grown larger than needed compared to current business levels. KPMG is one of the Big Four accounting firms, alongside Deloitte, EY and PwC. Its audit and assurance division includes around 1,400 partners and managing directors, based on its latest transparency report. The move comes as the firm looks to improve productivity and restructure its workforce. KPMG job cuts follow failed retirement push According to the Financial Times report, KPMG had been trying for several years to encourage more senior partners to retire early through voluntary schemes. However, these efforts did not attract enough participants, leading the firm to take direct action. The report said that the firm informed its audit and assurance partnership about the cuts during a meeting on Wednesday. Individuals affected were also notified the same day. While KPMG did not disclose the exact number of people impacted, the report said several dozen partners are expected to leave. KPMG says job cuts part of long-term strategy As stated in the FT report, KPMG said the decision is linked to its broader restructuring plans. "This action is connected 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," the company said. It added: "Our audit partner complement remains robust, and we are in a better position to welcome more people into our partnership over time." Partners who are leaving will receive financial packages and support to help them transition to new roles, "reflecting the value they have delivered for KPMG and our clients", the company said.
Open Questions
- Exactly how many partners will be affected
- What specific financial packages will be offered
- How this will impact audit quality or client service
