Big Four giant KPMG has begun downgrading its senior equity partners in the UK, moving them to lower-status salaried partner roles as part of a strategic shift to reduce headcount. The move mirrors similar actions by EY since 2022, as both firms pivot away from traditional partnership models amid a challenging consulting market.
KPMG's Career Conversations
KPMG, which paid its equity partners an average of £800,000 each last year, has reportedly been inviting partners for “career conversations” to discuss the transition. A spokesperson told City AM: “Over a two-year period we will have created more than 200 new roles in our partnership, and we look forward to more partner promotions during our next financial year. As you’d expect in a dynamic business like ours, all partners are performance managed.” The firm is effectively replacing equity partners with salaried partners, who do not hold a stake in the company or share in its profits.
Industry-Wide Trend
The Big Four – Deloitte, EY, KPMG and PwC – have increasingly shifted away from equity partner promotions in recent years. Instead, they offer salaried roles, which provide less financial upside but also less risk. This change moves away from the traditional method of pushing underperforming senior partners toward retirement or resignation.
Consulting Under Pressure
The professional services sector is facing headwinds, with consulting hit hardest. Slowing demand, heightened regulatory scrutiny, and competition from private-equity-backed boutique firms – many founded by ex-Big Four partners – are squeezing margins. The rise of artificial intelligence is also disrupting the industry, forcing firms to invest in new technologies while fee income declines. PwC, for example, is drawing up a blueprint to standardise its consulting services after a drop in fees.
Redundancies at KPMG
The equity partner demotions follow KPMG's announcement in March that it plans to cut 500 staff in its auditing arm due to “current market conditions” and very low attrition rates. The redundancies are part of a broader cost-cutting effort as the firm navigates a turbulent market.
Overall, the Big Four are reshaping their partnership structures to remain competitive, but the changes signal a significant departure from the traditional model that has defined the industry for decades.
