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Grant Thornton, the seventh-largest accounting firm in the US by net revenue, laid off around 300 employees, or 3% of its US workforce, the Wall Street Journal reported last week. Most of the cuts were to its tax and advisory practices.
The advisory sector has seen a rash of layoffs in 2023. In April, EY laid off about 3,000 people and Deloitte let go around 1,200. KPMG laid off ~700 people in February. At all three firms, the job cuts primarily affected the consulting divisions.
Consulting giant Accenture cut about 19,000 jobs worldwide in March, while McKinsey cut approximately 2,000 jobs in February, though those cuts were mainly to support services.
During the pandemic, demand for consultants spiked; firms increased hiring and saw revenues rise. EY’s consulting revenues grew by 27.1% in the fiscal year ending in June 2022, for instance, and it increased consulting headcount by 33%. KPMG’s total headcount increased by 12.4% in the fiscal year ending September 30, 2022, and its advisory practice grew by 19%. Grant Thornton’s advisory practice saw 18.1% growth in the fiscal year ending September 30, 2022, and the firm’s total headcount rose by about 6,000.
Now, amid fears of a recession and a decline in merger and acquisitions activity, demand has waned and firms have found themselves overstaffed. “We continue to have more people than needed to meet client demand,” KPMG’s vice chair of advisory said in an email regarding its layoffs, CPA Practice Advisor reported.
Grant Thornton cited a more sluggish economy and “pockets of underutilization” as reasons for its layoffs, the Wall Street Journal said.