KPMG to cut up to 600 jobs as low attrition and weak demand strain costs

KPMG is planning to cut up to 600 roles as it grapples with slowing demand and unusually low employee attrition, highlighting the pressure on professional services firms to rebalance costs after years of expansion.

According to reporting by the Financial Times, the Big Four firm has identified around 590 roles at risk, including approximately 440 assistant manager positions in its audit division and a further 120 roles in advisory functions.

LOW ATTRITION, HIGH COST PRESSURE

At the heart of the decision is an unusual imbalance. Low attrition—typically a positive indicator—has instead contributed to workforce oversupply, particularly among junior auditors and consultants.

KPMG said in a statement that “current market conditions mean our attrition rates are very low within certain parts of our audit population,” adding that it is now proposing to “right-size those areas”.

Insiders cited a prolonged slowdown in client demand, with some teams experiencing months of underutilisation. One person familiar with the matter told the publication that the firm had “a large bench for about six months and not much in the pipeline”, pointing to a thinning project flow.

The job cuts reflect a broader cooling in the consulting market after pandemic-era highs. Industry growth slowed to below 4% last year, while KPMG’s own advisory business contracted by around 3%, in line with declines reported across rivals including EY, PwC and Deloitte.

The firm’s advisory reductions are expected to focus on enterprise risk functions, alongside some back-office and economics roles. At the same time, KPMG is also offshoring certain support roles, including executive assistants, as part of its cost management strategy.

PROFITS HOLD, WORKFORCE SHRINKS

The restructuring comes despite improved profitability. KPMG reported a 14% rise in profit before tax to £576 million, driven by tighter cost controls, including pay freezes, reduced promotions, and a smaller equity partner pool.

This divergence—strong profits alongside workforce reductions—underscores a shift in priorities across the sector, where firms are moving from aggressive hiring to disciplined cost management.

Similar trends are playing out across the consulting industry. Bloomberg previously reported that McKinsey is considering cutting around 10% of roles in certain non-client-facing teams, signalling a broader recalibration.

A STRUCTURAL RESET UNDERWAY

KPMG’s move also highlights how firms are adjusting to structural changes, including AI-driven delivery models and evolving client expectations, which are reshaping both demand patterns and workforce requirements.

The cuts, currently under consultation, are expected to impact a relatively small share of the firm’s overall workforce but signal a deeper reset in how capacity is managed.

The immediate focus for KPMG will be navigating the consultation process and aligning workforce size with near-term demand. But the broader challenge lies in adapting to a slower, more selective growth environment.

With consulting demand expected to recover modestly in the coming year, firms will need to strike a careful balance—retaining critical talent while avoiding the overcapacity that defined the current downturn.

For now, the message is clear: after years of rapid hiring, the industry is entering a more cautious phase where efficiency, not expansion, is driving workforce decisions.