KPMG, one of the Big Four accountancy firms, yesterday announced it would slash 700 jobs in the UK, amounting to 7 per cent of its workforce in this country, due to the fall off in demand for accountancy and business advice services.
The company said it had "held out for as long as possible" before making the cuts, but could not delay them any longer because of the "adverse impact on business caused by the downturn in the markets".
The axe will fall across all of KPMG's operations, including its audit and tax advice arms, and jobs will be cut across the country.
A further 62 staff will be cut at its law firm, KLegal. KPMG Consulting, its management consultancy arm, has not been affected by this round of job cutting as it is preparing to split itself off and list separately through an initial public offering.
KPMG's job cuts are the latest in a wave of belt-tightening in the City, which has taken in other accountants and the investment banks, where cut backs have been dramatic because of the virtual drying up of mergers and acquisitions.
The firm said it would start a lengthy consultation with staff and would first seek employees who wanted to take voluntary redundancy. But KPMG's plans include the expectation that among the 700 headcount reduction there will be some compulsory redundancies.
It said in a statement: "The firm will offer voluntary redundancy or internal redeployment where possible. Where compulsory redundancies are made, KPMG will invest internal resources to help those affected find new opportunities."
The company, which employs a total of 12,000 staff in the UK and has 24 offices, informed staff about the job cuts yesterday and said it would now start talking to employee representatives over where the redundancies will fall.
It is expected that its audit and tax departments will be major casualties in the reduction, as firms tighten their belts about how much they are prepared to spend on their audit and other business services.
Yet the Big Four should benefit in the long run from the fact that one of their number, Andersen, has been knocked out of the market by its involvement in the Enron and WorldCom scandals.
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