KPMG lays off 400 consultants amid slowdown in risk and financial services advisory

KPMG has laid off around 400 consultants in its US advisory division, as demand weakens across key service lines tied to regulatory risk, customer operations and financial services.

The cuts, which account for roughly 4% of the advisory workforce, were confirmed to Business Insider by a person familiar with the matter. Employees were informed during a call on Wednesday, with some reporting they had received calendar invites a day earlier.

The move reflects a broader recalibration within the firm as traditional consulting demand slows in certain segments while newer areas gather pace.

Pressure builds in core advisory segments

The layoffs were concentrated in parts of the business that have seen declining demand in recent months.

According to the person familiar with the matter the impacted areas include:

Regulatory risk advisory
Customer operations consulting
Financial services advisory

These segments have historically formed a significant part of KPMG’s advisory offering, particularly for clients navigating compliance, operational restructuring and sector-specific transformation.

However, demand patterns are shifting as clients redirect spending towards technology-led capabilities.

A workforce realignment, not a hiring freeze

KPMG has framed the move as a strategic adjustment rather than a contraction.

In a statement to Business Insider, spokesperson Russ Grote said the decision was aimed at ensuring “our people’s skills and capabilities are aligned with future demand”. He added that the firm would continue to support employees in upskilling while reassessing “the size, shape and skills of our workforce”.

The firm’s global scale underscores the targeted nature of the cuts. KPMG employs more than 276,000 people worldwide, with over 10,000 employees in its US advisory business.

Within that structure, different parts of the business are moving at different speeds.

Growth continues in AI and specialised services

While some advisory segments are slowing, others are expanding.

According to Business Insider, areas such as cybersecurity, managed services, forensic consulting and AI transformation continue to see strong demand. KPMG is still hiring in these domains, particularly for engineers and specialists who can support AI-led projects.

This divergence highlights a broader trend across consulting. Demand is not shrinking overall, but shifting towards capabilities that combine technology, data and domain expertise.

Additional data points underline the shift:

More than 90% of employees at KPMG’s US firm use AI weekly, according to the person familiar with the matter
The firm has introduced internal initiatives such as the “AI Spark Innovation Awards” to encourage applied use of AI in client work
Employees are increasingly expected to demonstrate how they are integrating AI into their roles, as reported by Business Insider

The emphasis is moving from generalist consulting to specialised, technology-driven expertise.

Retention dynamics are also changing

The layoffs come at a time when employee turnover has slowed compared with expectations.

Following the period known as the “Great Resignation”, when employees moved frequently in search of higher pay and flexibility, workforce mobility has stabilised. According to Business Insider, fewer employees are leaving KPMG than anticipated.

This has created additional pressure on workforce planning. With lower attrition, firms must actively reshape teams rather than rely on natural exits to rebalance capability.

At the same time, only a small portion of the cuts were linked to performance. Around 2% of the 4% workforce reduction was attributed to performance-related factors, suggesting the majority of the layoffs were strategic rather than corrective.

A wider industry pattern

KPMG’s move reflects a broader recalibration across the consulting sector.

As AI adoption accelerates, firms are redefining what constitutes core capability. Traditional advisory areas tied to compliance, operations and sector-specific consulting are facing slower growth, while demand for AI, cybersecurity and platform-based services is increasing.

Other firms are also embedding AI into performance and evaluation systems. Business Insider reports that Boston Consulting Group has integrated AI usage metrics into employee assessments, with adoption rates reaching around 90%.

This indicates a structural shift rather than a cyclical adjustment.

What comes next for consulting talent

The immediate impact of the layoffs is contained. But the signal is wider.

Consulting firms are not reducing their reliance on talent. They are redefining the kind of talent they need.

Roles that depend on traditional advisory frameworks are likely to face pressure as clients prioritise speed, automation and integrated digital capabilities. At the same time, demand is rising for professionals who can combine domain expertise with technological fluency.

KPMG’s own messaging reflects this transition. As its US chair and CEO Tim Walsh told Business Insider previously, employees are expected to adopt and use AI tools because it is “critical to your success in the future”.

The shift is already underway. The question for the industry is how quickly its workforce can adapt.

Strategic HR