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Big Four audit firm KPMG is facing something of an internal comms meltdown, City AM understands, amid complaints of a lack of communication during a ‘mismanaged’ redundancy round.
In late March, it was reported that KPMG UK was set to axe more than 500 staff in the latest redundancy round at the Big Four giant. Those affected include 440 assistant manager roles in the audit business (Grade D) and 120 roles across the advisory arm, which impacts roughly 6 per cent of the division’s 7,100 employees.
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0:00
Getting made redundant is always grim, but the consultation that's currently ongoing at KPMG
0:05
appears to be particularly brutal. Employees are complaining of a mismanaged process
0:11
in some cases finding out via the media that their job has gone
0:15
CityAM understands there is widespread frustration with the firm over how it is handling a round of
0:21
job cuts, as the professional services sector grapples with a widely changing economy and some
0:27
of the toughest comms situations a company can face. Our professional services editor
0:31
Maria Ward-Brennan, broke the story and she joins us now. Welcome, Maria
0:36
Hello. Give us a bit of an insight into what's going on over at KPMG at the moment
0:40
Yes, so it seems to be a little bit of a mess for, ironically, one of the smallest of the
0:45
big fall firms. But yes, so obviously it got announced the fact that there are going to be
0:51
job cuts, nearly about 500. But it seems that sources have told me that when they got one email in one section of the
0:58
company in terms of their advisory, they weren't actually told that also the audit were also
1:02
up for redundancies as well. So they were finding out through some of the media sources that actually a lot more jobs
1:09
are going than they initially thought via their emails, internal comms sites
1:14
But yeah all in all it seems to be not the best managed It seems that from what I getting with a lot of anger that management is running around to try and quickly to cut as much jobs
1:27
as they possibly can because they're grappling with many factors of issues going on at this firm
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that potentially they might be cutting things a bit too quickly, not feeding
1:37
back to people why, how, what's going to happen and then people
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are just sort of really showing up to work and just wondering
1:45
what's going to happen the next day it seems. Because you mentioned in your story that some people who could be on the line are people who got promoted within the last year
1:53
What's going on there? Yeah. So when I was on a deep dive down LinkedIn, which ironically, a few people actually have their looking to hire switched on
2:01
Oh, the open to work. Open to work. Very bold. Very bold. In a climate like this
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I can imagine. But if you're running against a lottery and it's all graded because a lot of them are going to the consultation point at the moment
2:12
but particularly on the audit side, you know, they're going to be graded
2:16
So they think I mightn't pass this. I'm going to probably lose my job
2:20
They may as well try and get out there a bit quickly. But yeah, the more I went on to people's profiles, I was like, oh, actually, you're only in this job six months
2:28
You only got promoted six months ago. And with LinkedIn, it means five months
2:32
So because I was that month behind. So, yeah, it's a bit of a slap in the face to these people who thought, oh, well, this is all great
2:38
I've been promoted at my job. And now potentially it all going to be you know gone really from them Do we know if these people are being sort of well remunerated on their way out No I had a sore sort of state to me that it going to be very much by the books
2:53
in terms of what they can legally offer people. The legal minimum it seems to be rather than actually
2:59
But again, you know, if you're letting 500 people go because of cost problems
3:03
I don't think the firm is going to be offering a big package
3:07
Very much a bronze handshake. Yes. It feels like a particularly kind of egregious comms mistake when you are literally a management consultancy
3:16
Your job is to manage stuff. Yes. But again, I had someone speak to me on this the other day that it is very, very difficult when you're, you know, we say that
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And obviously that is our job to obviously advise other people. But part of that is actually not communication
3:31
Communication is not one of their sort of strategies. HR is not one of their departments or PR is not one of their departments, I must say
3:37
but if someone pointed out the other day these are big, big beasts
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these are big companies that hire a lot of people in this city
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and obviously all ages there's a lot of people who get their news from
3:50
different sources but they mightn't click on open up emails it mightn't, you know, it might be
3:57
a bit difficult to try and keep your workforce as informed as you possibly can
4:01
when I can imagine a lot of the internal comms don probably actually know what going on themselves That something that striking about this story as well it does seem to be really up and down the organisation I know you were talking to us on our opening episode last week about equity partners as well at various big four firms
4:15
What does this tell us about management consultancy and the big four
4:19
How worried should people in the sector be? I think they all are very worried
4:22
I think if you speak to any consultants, you know, which I have, they are concerned because it's AI from one side
4:30
It's tough competition from the other side as well. But it's also AI competition as well, because there's a lot of these consultancy firms setting up
4:38
There's one and two firms that are doing a lot better than they would like years ago because they have the best tech behind them
4:44
And they're also running toe to toe with these beasts. And at the end of the day, it all comes down to cost, how much you're charging per hour in the time when the economy is stagnated and businesses are trying to watch the bottom line
4:57
And if they can find a consultant a hell of a lot cheaper out there, they're going to do that because, you know, it's not all about having a shiny KPMG EY on your books anymore
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You just need someone to sort of fill the spot while you sort of tinker on, really
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Professional services editor Maria Ward-Brennan, thank you very much for coming in
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And to everyone who is losing their jobs in that particular company and across the industry, we wish you well
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you
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