KPMG, one of the Big Four accounting firms, is trimming its workforce again. The company confirmed this week that it is laying off approximately 4% of its U.S. advisory staff—a move that underscores a broader pullback in professional services spending as clients tighten budgets amid economic uncertainty.
The layoffs, first reported by internal sources and later confirmed by a company spokesperson, affect employees in the firm's advisory division. This unit provides consulting on everything from technology implementation to risk management and mergers. The cuts are not sweeping across the entire firm, but they signal a clear recalibration in a segment that had boomed during the pandemic-era deal frenzy.
"We are making targeted adjustments to our advisory workforce to better align with current market demand," a KPMG spokesperson said in a statement. "This is not a reflection of our people's performance, but rather a response to slowing client spending in certain areas."
The move comes as no surprise to industry watchers. After years of double-digit growth, the consulting sector is hitting a wall. Inflation, high interest rates, and geopolitical instability have made corporate leaders cautious. Companies are delaying non-essential projects—especially large-scale digital transformations and regulatory compliance overhauls—until the economic picture becomes clearer.
A Pattern Across the Big Four
KPMG is not alone in this. Rivals Deloitte, Ernst & Young (EY), and PricewaterhouseCoopers (PwC) have all announced layoffs or hiring freezes in recent months. In early 2023, EY scrapped its plan to split its audit and consulting businesses, leading to thousands of job cuts. Deloitte laid off about 1,200 employees in the United States last spring, while PwC announced a modest reduction in its advisory ranks.
The pattern is consistent: firms expanded aggressively during the low-interest-rate environment of 2020 and 2021, when clients were eager to spend on digital transformation, cloud migration, and post-pandemic restructuring. Now, with borrowing costs high and recession fears lingering, those same clients are pulling back.
"The consulting industry is cyclical, and we're definitely in a down cycle," said a former KPMG partner who asked not to be named. "Firms over-hired, and now they're correcting. It's tough, but it's not unexpected."
Where the Cuts Are Hitting
The 4% reduction translates to roughly 500 employees, based on KPMG's advisory headcount of about 12,000 in the United States. The cuts are not limited to junior staff; reports indicate that managing directors and senior partners have also been affected in some cases.
The hardest-hit areas appear to be strategy consulting and certain technology-related practices, where demand has softened most. Meanwhile, areas like tax advisory and audit remain relatively stable, as those services are less discretionary. KPMG has also been investing in areas like artificial intelligence and cybersecurity, where client interest remains high.
The layoffs come with severance packages and outplacement support, according to internal communications reviewed by this reporter. Some affected employees have been offered roles in other parts of the firm, though openings are limited.
The Human Impact
For those on the receiving end, the news is jarring. Consulting is a high-pressure, high-reward field, and layoffs have historically been rare among the Big Four. But the current environment is reshaping expectations.
"I thought I was safe because I worked on a big client project," said one affected employee, who spoke on condition of anonymity to protect future job prospects. "But they told us it was about headcount targets, not performance. It feels impersonal."
The layoffs also raise questions about the long-term strategy of the firm. KPMG has been trying to grow its advisory business to compete more directly with pure-play consulting firms like McKinsey & Company and Boston Consulting Group. But the industry's cyclical nature makes it difficult to maintain that growth trajectory without periodic cuts.
What This Means for Clients
For companies that work with KPMG, the layoffs could mean longer wait times for advisory services or a shift in the teams assigned to their projects. However, the firm insists that day-to-day client work will not be disrupted.
"We have carefully managed this process to ensure continuity for our clients," the spokesperson said. "Our commitment to delivering high-quality service remains unchanged."
Still, some clients may view the layoffs as a sign of instability. In a competitive market, firms that can maintain strong teams through downturns often emerge stronger when demand picks up again.
The Road Ahead
KPMG's layoffs are a symptom of a larger trend: the professional services industry is adjusting to a new normal. While the job market for consultants remains tight compared to other sectors, the era of relentless hiring is over—at least for now.
Analysts predict that the advisory market will recover once interest rates stabilize and corporate confidence returns. But that recovery may take until late 2024 or 2025. Until then, firms like KPMG will continue to fine-tune their workforces, balancing cost discipline with the need to retain top talent for the next upturn.
For the 500 or so employees leaving KPMG, the immediate focus is on finding a new role. Many will likely land at smaller consulting firms, corporate strategy departments, or tech companies. The broader consulting ecosystem remains resilient, even if it is currently in a phase of contraction.
As the economy evolves, so too will the strategies of the Big Four. For now, KPMG is making the hard choice to cut now, rather than wait for demand to recover on its own.
Ahmed Abed – News journalist