[Updated with additional information.]
OK, here’s what we were told today about the video message from KPMG CEO Lynne Doughtie that was posted internally last night. What we know is pretty much the same as what has been posted so far to Reddit and Fishbowl.
Basically what we were told by a source was Lynne said the firm would not be able to pay year-end variable compensation to employees this year and that there would be significant reductions to partner compensation.
Also, we got confirmation from another source this evening that Doughtie did reiterate the “layoffs as a last resort” message she told KPMGers on March 26 during an internal video message about how the firm was going to operate during the COVID-19 crisis.
The source told us:
I can confirm Lynne stated in the latest video update that “our partners are doing everything possible to avoid layoffs” and that a “reduction in force will be the last resort.”
During the day yesterday, before Doughtie dropped her video message last night, we heard rumors that KPMG partners in the U.S. were having their pay cut by 50% to avoid layoffs. We weren’t able to confirm that yesterday.
But I asked one of our sources about that today and they said:
50% reduced partner draw for the rest of the fiscal year (through Sept. 30).
So it does look like that is a thing.
Regarding variable comp or the lack thereof, one source said:
The VC program is so low at US KPMG, people understand and accept the hit. Very happy we are not doing layoffs at this point in time. That’s the mood of the crowd.
The other source told us that KPMGers they talked to aren’t too unhappy about losing variable compensation if it means staying employed:
It’s not a lot and it’s worth it to keep our jobs. Many of us wouldn’t be surprised to take a pay cut.
But again consensus has been as long as it means no layoffs, we can withstand it without too much complaint.
Another thing that was posted on Fishbowl that we haven’t been able to confirm is that Doughtie didn’t mention anything about promotion freezes or raises not be given, so that’s a plus if true. But we did get confirmation that she mentioned other measures such as:
- Hiring freezes
- Reduced capital investment
- Eliminating cash Encore awards
- Eliminating summer gifts to employees
So that means NO OMAHA STEAKS, people!
If we’re missing anything that was said in the video or if someone can confirm the absence of red meat gifts, send us an email or shoot us a text using the info below.