KPMG lays off 4% of its advisory team over slowing demand

In a significant move reflecting changing market conditions, KPMG has announced layoffs affecting approximately 400 consultants from its US advisory division. This decision was primarily driven by a decline in demand within specific sectors, particularly regulatory risk advisory, customer operations, and financial services. The affected employees were notified during a conference call on Wednesday, a situation that some insiders reported was anticipated with calendar invites circulating as early as Tuesday. Russ Grote, a spokesperson for KPMG, emphasized that the layoffs are part of a broader strategy to align the firm’s workforce with future market needs. He assured that the company is committed to supporting its employees in upskilling and adapting to these changes. KPMG, which employs over 276,000 individuals globally and has more than 10,000 in its advisory sector, continues to see growth in areas such as cybersecurity, managed services, and forensic consulting. These divisions are thriving alongside KPMG's efforts to embrace AI transformation, which remains a key focus for the firm. Despite the recent layoffs, KPMG is actively hiring in crucial domains like AI and cybersecurity, particularly seeking engineers and specialists. Interestingly, the current job market reveals that fewer employees are departing from KPMG than previously anticipated. Following the trend of the 'Great Resignation,' many are opting for stability over change, especially as rapid advancements in AI redefine workplace dynamics and job security. In a bid to encourage innovation and the effective use of AI, KPMG has recently introduced the "AI Spark Innovation Awards," offering cash prizes to employees who successfully implement AI solutions within their roles. Additionally, KPMG has launched a dashboard enabling consultants to track peer AI usage and set personal performance goals. While the firm is promoting AI integration, other consulting companies, like Boston Consulting Group, are incorporating AI performance metrics into their evaluations, indicating a trend towards performance-driven approaches in the industry. KPMG’s leadership continues to stress the importance of adopting AI tools, signaling a pivotal shift in how consulting firms will operate moving forward.