KPMG, one of the "Big Four" accounting firms, is implementing significant workforce changes, with approximately 100 U.S. audit partners expected to exit the firm. This decision follows a multi-year effort to encourage voluntary retirements that did not meet its objectives.
What happened
KPMG is reducing its U.S. audit partner ranks by 10% for 2026. This action comes after a prolonged push for voluntary retirements among senior partners failed to achieve the desired headcount reduction. As a result, some partners will take early retirement, while others are being asked to retire.
How many employees affected
Approximately 100 U.S. audit partners are expected to be affected by these changes, representing 10% of the firm's U.S. audit partners. The reductions do not extend to managing directors within the audit practice.
Why layoffs happened
The firm stated that the layoffs are part of a multi-year strategy to align the "size, shape, and skills" of its team with its audit platform. KPMG clarified that the decision is not a result of poor performance by individuals or a decline in demand for its services, as its U.S. audit business is reportedly growing. Instead, it addresses a "bottleneck" in senior roles due to low attrition and the inadequacy of voluntary exit packages to manage capacity. The firm aims to improve productivity and restructure its workforce.
Company background
KPMG is a global professional services network and one of the "Big Four" accounting firms, alongside Deloitte, EY, and PwC. Its U.S. audit and assurance division includes approximately 1,400 partners and managing directors.
Industry impact
KPMG's partner reductions align with a broader industry trend where major accounting firms are adjusting their workforces after aggressive hiring during the pandemic. Other firms, including EY, have also made partner-level reductions. Removing partners is a complex and costly process, involving obligations such as buying out equity stakes and issuing additional payments.
What's next
Affected partners are slated to receive financial packages and placement support to assist them with their transition. KPMG indicated that its audit partner complement remains robust, positioning the firm to welcome more individuals into its partnership over time.