KPMG has slashed the bonus pool of its UK workforce and reined in commission for salespeople as its profits falter amid a slowdown in the dealmaking environment this year, City A.M. has learned.
The big four firm told staff in its mid-year update last week that some bonuses would be slashed by as much as half while sales staff were told their commission could be held back until the end of the year.
In a note to staff seen by City A.M., bosses told workers that while the company had seen “double-digit growth in many areas of the firm” it had “not been as high as we’d planned”.
“This means that our profit, and our bonus pool as a result, will be reduced on our original expectations,” bosses said.
Staff in the firm’s UK-wide business development team were told yesterday that the company would hold back 40 per cent of total discretionary commission until the year end, but it could not guarantee they would be paid the full amount, a source on the call told City A.M.
City A.M. understands the measure was last taken by KPMG bosses at the height of the pandemic in 2020 when corporate clients reined in fees.
The figures underscores the rippling effect of the deals downturn this year, as investors sit out the volatility that has rocked markets. Partners at KPMG conversely pocketed record sums last year after a dealmaking frenzy in 2021.
A spokesperson for KPMG told City A.M. that payouts for UK staff had been hit by the market conditions.
“A challenging economic environment at the start of our financial year saw a softening in the deals market, and some clients defer projects to later in the year; this dynamic has affected the performance of some areas of our firm,” the spokesperson said.
“We remain focused on delivering our firm’s strategy and continue to invest through the economic cycle, in new technology and services, supporting our clients as they navigate this volatile operating environment.”
Head of markets for KMPG in the UK, Dan Thomas, is understood to have told sales people yesterday that the firm needed to make “difficult decisions” to cope with the slowdown.
KPMG has already taken steps to rein in its costs globally in the past year, becoming the first big four firm to slash jobs in the US in February when it laid off two per cent of its workforce, representing around 700 staff.