KPMG is cutting around 10% of its US audit partners, marking a significant step in efforts to improve productivity after years of unsuccessful attempts to encourage voluntary retirements.

The move was disclosed during a meeting on Wednesday, where attendees were told the size of the audit partnership had become misaligned with the firm’s business needs, according to people familiar with the matter.

The reduction is expected to affect several dozen partners, although KPMG did not disclose an exact figure.

The decision comes as the firm seeks to streamline operations under new leadership, following the appointment of Tim Walsh as chief executive of the US business nine months ago.

Walsh, a long-time veteran of KPMG’s audit division, has since introduced changes to leadership within the audit and assurance practice.

Partnership size under scrutiny

The cuts reflect broader concerns about the scale of KPMG’s audit partnership relative to both its business volume and its competitors.

The firm’s audit unit has been viewed as larger than those of rival Big Four firms, including Deloitte, EY, and PwC.

KPMG’s most recent transparency report shows it has around 1,400 partners and managing directors in its audit and assurance division, though the firm does not break out the number of partners specifically.

Despite the reductions, KPMG emphasised that its audit partner base remains strong and positioned for future growth.

“This action is connected to a multiyear strategy to align the size, shape, and skills of our team to the power of our audit platform to best serve our clients and protect the capital markets,” KPMG said.

“Our audit partner complement remains robust, and we are in a better position to welcome more people into our partnership over time.”

Voluntary exits fall short

The decision to proceed with cuts follows years of efforts to reduce partner numbers through voluntary retirement programmes.

Financial Times reported, citing people familiar with the situation, that those initiatives consistently failed to attract the level of participation needed to achieve the firm’s restructuring goals. 

As a result, the firm has opted for a more direct approach to recalibrate its workforce.

Social media forums used by KPMG employees indicated that members of the audit and assurance partnership were informed of the cuts during the Wednesday meeting, with affected individuals notified the same day.

Partners leaving the firm will receive compensation and support as part of their exit.

Partners who are leaving will receive financial packages and placement support, “reflecting the value they have delivered for KPMG and our clients”, the firm said. 

KPMG remains the smallest of the Big Four accounting firms, but has modestly expanded its presence in the US audit market.

The firm audited 9.8% of US-listed companies in 2025, up from 9.2% the previous year, according to Audit Analytics.

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