KPMG lays off 4% of its advisory team over slowing demand
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- KPMG cut some 400 US consultants amid slowing demand in key sectors.
- Employee attrition rates have been lower than expected.
- KPMG is still hiring for AI transformation, focusing on engineers.
Big Four firm KPMG laid off about 400 consultants in its US advisory division on Wednesday.
The cuts focused on consultants in regulatory risk advisory, customer operations, and financial services, a person familiar told Business Insider. These divisions have seen slowing demand in recent months, the person said.
Employees were informed of the layoffs during a call at noon on Wednesday. On Reddit, posters who said they were employees reported that they received calendar invites for the call as early as Tuesday.
Russ Grote, a spokesperson for KPMG, said in a statement to Business Insider that the firm's actions "focus on a strategic realignment to make sure our people's skills and capabilities are aligned with future demand."
He added that the firm "will continue to support our people in upskilling for the future, while evaluating the size, shape, and skills of our workforce to best serve the market."
KPMG employs over 276,000 people worldwide, and more than 10,000 people in its advisory business. That's largely divided between its deal advisory and strategy business, which focuses on how companies can use transactions and acquisitions to drive transformation and has seen strong growth of late, and its consulting practice, which focuses on helping clients transform themselves.
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Some parts of the consulting business are thriving, including its cybersecurity, managed services, and forensic departments, along with sectors that deal with AI transformation, the person familiar told Business Insider.
The firm is still hiring in key areas like AI, cybersecurity, and managed services, with a focus on engineers and specialists supporting AI transformation.
The cuts come as fewer employees are leaving KPMG than the firm expected.
Four years after the "Great Resignation," in which millions of workers quit in hopes of boosting salaries and job satisfaction, workers are now sticking it out where they are. As they seek stability, rapid advances in AI are changing what it takes to succeed at work — and who gets to keep their jobs.
Earlier this year, KPMG launched the "AI Spark Innovation Awards" in its advisory division, which is doling out cash prizes to consultants who can highlight "an incredible thing that they've done with AI," Rob Fisher, KPMG US's vice chair of advisory, previously told Business Insider.
Late last year, the firm introduced a dashboard where employees can see how their peers are using AI and set their own goals .
While KPMG is adopting the carrot-and-stick approach to AI up-skilling, other consulting firms are taking a more performance-driven approach.
Boston Consulting Group — where AI adoption hit 90% last September — has been integrating AI metrics into performance evaluation.
KPMG's global AI workforce lead, Niale Cleobury, told Bloomberg in October that the firm is asking employees to explain how they'll use AI in their year-end goals.
KPMG US did not comment on whether AI use is a part of performance evaluations. Tim Walsh, the firm's US chair and CEO, told Business Insider in November that the firm is employees "you need to adopt and use the tools that are being provided because it's critical to your success in the future."