KPMG lays off 4 percent of Advisory staff with severance terms criticized as insulting

KPMG's recent decision to lay off 4 percent of its Advisory staff, particularly in the Tech and Data areas, indicates a significant restructuring effort. The layoffs have been framed as a necessary response to evolving market dynamics, particularly in sectors like AI and Cyber.

The severance package offered to affected employees has been met with criticism, described as 'insulting and disgraceful' by some staff. While the package includes enhancements beyond statutory redundancy pay, the formula used to calculate entitlements may not adequately support employees, especially those with longer service times.

This restructuring is part of a broader trend within the consulting industry where firms are reassessing their workforce in light of market pressures and changing client demands. KPMG's consulting revenue reportedly fell by 9 percent between fiscal years 2024 and 2025, reflecting a challenging environment that many firms are navigating.

The layoffs not only impact the employees directly involved but may also have repercussions on KPMG's overall culture and its ability to attract and retain talent. The backlash against the severance terms may lead to decreased morale and trust among remaining staff.

As KPMG and other firms in the Big Four adjust to these changes, the long-term effects on their consulting practices and client relationships will be critical to monitor, particularly as competition intensifies in the face of technological advancements.