Revealed: KPMG and Deloitte offer bumper redundancy packages to slash headcount
KPMG and Deloitte are offering UK staff bumper redundancy packages as they look to slash their headcount and trim costs, City PM can reveal.
The two accountancy companies, as well as PwC, have all ramped up their payouts to employees after a slowdown in the sector’s traditional ‘attrition model’, in which around 15-20 per cent of staff quit every year. A tight jobs market has meant far fewer staff are leaving the companies voluntarily.
All of the the three firms have been forced to lay off staff this year. Between KPMG, Deloitte, and, most recently, PwC, there have been around 600 audit middle-tier jobs on the chopping block so far this year.
KPMG ditches statutory cap
In March, it was revealed that KPMG UK planned to axe over 500 staff across its auditing and advisory divisions, including roughly 440 assistant manager roles in the audit business and 120 roles in advisory.
Staff affected were informed of the redundancy consultation that same month, and those who signed the settlement have since left the firm.
According to an internal memo as seen by City PM, KPMG said all affected employees will receive a minimum of eight weeks’ basic salary, including any statutory redundancy pay (SRP).
Under English employment law, employees must have at least two years of continuous employment to qualify for SRP, but the firm waived this requirement.
The law also calculates SRP using a strict formula based on age and length of service. The government caps ‘a week’s pay’ for this calculation, currently set at £751. However, KPMG removed the £751 statutory cap and calculated the payout based on the employee’s actual weekly salary.
The package KPMG staff received also included payment in lieu of notice or garden leave where applicable, but it stated that employees will not be eligible for any full-year 2026 bonus.
Clare Brennan, employment partner at Hunters Law, explained: “In practice, enhanced redundancy payments are often offered in conjunction with a settlement agreement, giving employees an incentive to waive potential claims in return for a payment that is usually significantly higher than their statutory redundancy entitlement.”
However, according to a close KPMG source, some staff who had been at the firm for over eight years were unhappy with the offer because junior staff were receiving packages similar to those of more senior long-serving staff.
KPMG confirmed that, following a collective consultation with staff affected by the proposals, it enhanced its redundancy package.
Deloitte dangled eight-month payouts
Deloitte was revealed in June to be laying off nearly 200 audit roles as part of a voluntary redundancy round.
It was understood at the time that as many as 175 auditors, including managers and assistant managers, would be on the chopping block, representing less than three per cent of its audit and assurance business and less than 1 per cent of the UK firm.
Under English law, accepting voluntary redundancy is still legally classed as a dismissal. Therefore, the baseline legal rules governing a voluntary package are based on the same statutory minimums as those for compulsory redundancies, though employers usually offer enhanced terms to incentivise staff to leave.
City PM understands that Deloitte put a highly generous package on the table, including eight months of full pay. It is understood that those who wanted to accept the package had to do so by 10 July, and that if they accepted, they would be gone from the firm by the end of the month.
Deloitte is not the only firm to have offered a voluntary redundancy round. City PM revealed last week that PwC reduced its audit division through a “small number of targeted voluntary exits.”
KPMG and Deloitte were contacted for comment.