KPMG’s UK deals team faces another blow as the firm slashes bonuses yet again, signaling the persistent strains caused by a slowdown in dealmaking this year.
KPMG, one of the Big Four firms, has informed its deals division about additional cuts to their bonuses. This move follows a prior reduction in payouts by around half back in May, leaving the team uncertain about the extent of the latest slashes.
A source revealed that an email circulated merely stated that bonuses would be “lower,” without specifying the exact reduction. Earlier this year, KPMG had already cautioned its staff about lower discretionary bonuses in the face of a challenging economic environment affecting various markets, including Deal Advisory.
According to a KPMG UK spokesperson, the challenging economic conditions have softened several markets, including Deal Advisory, contributing to the need for bonus adjustments.
This decision aligns with KPMG’s broader cost-cutting measures, which previously saw a reduction in the bonus pool for the entire UK workforce and a scaling back of commissions for sales personnel. These moves were prompted by a drop in profits tied to a slowdown in deals fees.
KPMG is also set to cut approximately 100 jobs in its deal advisory business in the UK, part of a strategic restructuring to facilitate the redeployment of employees to other areas within the company.
The merging of the Canary Wharf-based consulting and deal advisory units, while seemingly unrelated to recent job cuts, was revealed last month.
KPMG isn’t alone in grappling with the economic downturn. Its counterparts EY, PwC, and Deloitte have all faced significant challenges due to a sharp decline in fees resulting from the slowdown in mergers and acquisitions. In the UK, deals have hit a 14-year low this year, attributed to rising interest rates and volatile prices disrupting the anticipated wave of takeovers.
The Big Four have collectively announced around 1,800 job cuts this year, with Deloitte leading the pack with plans for 800 layoffs.
Last week, PwC UK and PwC Australia joined the ranks of companies implementing layoffs to navigate the challenging economic landscape.
