KPMG has announced plans to reduce its UK advisory workforce by approximately 200 roles in the coming weeks, citing persistently low staff attrition as a key factor behind the redundancies. The cuts represent around 4 percent of the firm’s UK advisory employees and will affect personnel across all pay grades. A formal consultation process to determine which positions will be eliminated is currently underway, with affected staff expected to leave as early as next month.

The London-based firm explained that the decision comes amid a broader industry challenge: despite a decline in consulting work, not enough employees have voluntarily left to balance the workforce. Unlike previous years, when the post-pandemic “Great Resignation” led to high turnover and recruitment efforts, the current environment is characterized by more cautious client spending. Factors including geopolitical tensions, trade disputes, sluggish economic growth, and persistent inflation have contributed to a 3 percent decrease in KPMG’s advisory revenues over the latest financial year.

KPMG’s situation mirrors that of other major accounting and consulting firms in the UK. Deloitte, for example, recently announced plans to cut about 175 roles, also attributing the reductions to low attrition levels. Similarly, EY and PwC have reported contractions in their consulting divisions as demand from clients diminishes.

Industry sources note that the shift in demand and workforce size has been exacerbated by a sharp slowdown in hiring, leaving firms with a surplus of staff. Typically, companies might manage a smaller volume of work by not replacing employees who leave voluntarily. However, as fewer consultants are departing, firms are increasingly resorting to layoffs to align headcount with workload.

KPMG has also emphasized that the restructuring is aimed at ensuring the firm has the right skill sets to meet evolving client needs. The rapid integration of artificial intelligence into consulting practices is widely acknowledging the growing importance of softer skills, such as problem-solving and client engagement, which are expected to shape future workforce requirements.

The firm’s overall UK headcount has decreased amid these changes, from more than 17,000 employees during the pandemic to around 15,800 at present. So far in 2024, KPMG has reduced its workforce by approximately 1,000 positions. The average remuneration for a UK partner at KPMG was reported to be £880,000 last year.