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KPMG is set to cut down its UK audit workforce by 440. The decision does not stem from a sudden drop in business as audit has remained a stable revenue stream for the firm, even as consulting demand softened.
The imbalance lies in workforce dynamics. Fewer professionals have been leaving the company recently. It means that there are more people than are actually needed to handle the workload. The company has started a consultation process by informing around 600 of its employees that their jobs are at stake. The number of people being let go is almost 6% of the total audit staff in the company’s UK unit.
The impact of this restructuring is likely to be felt most by assistant managers. Many are qualified accountants with a number of years of experience under their belts. The emphasis on mid-level employees is a clear indication of a change in the manner in which these firms are rethinking their teams.
Mid-level employees essentially undertake the bulk of the execution-based work, which is gradually being redefined by automation tools and processes. Entry-level hiring across the sector has already been impacted. Meanwhile, at the senior end of the spectrum, the situation remains largely unchanged.
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The pattern is similar to a broader readjustment across the Big Four firms - Deloitte, PwC, and EY. Hiring is down, cost-cutting is up, and firms are questioning the resources they truly need. Technology is also a factor in the audit process as it is becoming more automated.
The number of manual tasks has decreased with technological advancement. Another factor is the economic environment and the need to stay lean and avoid overstaffing. KPMG’s announcement is a reflection of this phase of transition. The company is responding to a new normal where growth is being monitored, attrition is unpredictable, and efficiency is paramount.
