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May 31, 2009

KPMG makes cuts to tax practice

KPMG is to lay off an undisclosed number of staff from its UK tax practice in response to the economic downturn.

A spokesman said the firm did not know exactly how many staff might be affected but every effort would be made to redeploy staff into other areas. The firm could not provide a timeline for when the layoffs would take effect.

The job cuts specifically affect its transactions related tax services. The spokesman said other areas of its tax practice, including pensions and indirect tax, were doing well.

The cuts have come despite the implementation of KPMG’s highly publicised Flexible Futures scheme, which was launched earlier this year.

The initiative allowed employees to work four-day weeks, equivalent to a 20 percent pay cut, or apply for up to 12 weeks of partially-paid leave at about 30 percent of wages.

More than three quarters of KPMG’s 11,000 strong workforce signed up to the scheme.

KPMG said Flexible Futures had already been put to use in the tax area, but while it was an effective tool to manage costs, it had not been sufficient to offset the decline in transaction related tax activity.

The firm said it was still taking on 600 graduates in September, which was down from the 750 it recruited in September 2008.

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