About 1,000 staff at the Birmingham office of KPMG will be facing a tough decision after the company asked them to consider shorter hours or sabbaticals on reduced pay.
The accounting giant has asked its staff to sign up to a voluntary programme aimed at cutting back on personnel spending without making redundancies.
The firm is believed to be keen to slash costs, but unwilling to let people go after it was caught short coming out of the last recession when it cut too many jobs.
Staff were presented with the optional plan at the end of last week. They can choose to either start a four-day week or take a break of one to three months on 30 per cent pay.
All 11,000 staff at the firm have until the first week of February to make a decision. The plan is set to run until September 2010.
A spokesman for the firm said: “We have offered staff the possibility of a four-day working week or sabbatical leave periods. We are mindful of the difficult conditions that everyone is operating in.” He added it was impossible to rule out job cuts in the future, but said: “This move gives us some flexibility to manage the workforce. It helps us to avoid the need of making any redundancies.”
KPMG is the first of the large accounting firms to take concrete action over staffing costs, but the others are expected to follow suit. The firm –traditionally one of the largest graduate employers – has already cut the intake by 25 per cent to around 750 last year. This year the firm expects to take on only about 600.
The Birmingham office of KPMG, on Cornwall Street in the city’s financial district, was recently subjected to an arson attack, where an unknown criminal smashed the front door before pouring a flammable liquid into the lobby.
Although no one was injured, the lobby was damaged and the bottom three floors were heavily smoke-logged.
The UK branch of KPMG, Europe’s largest integrated accountancy firm, saw turnover rise to just over £2 billion in the year ending September 30, an increase of three per cent on the same period the year before.
This figure was lower than the firm’s main rivals.
At the time, Birmingham office boss Mel Egglenton said corporate finance had been a particular problem, adding: “Deal flow is poor, absolutely poor, getting finance is very difficult.
“There was a lack of finance and I think that’s meant the people who have got cash are sitting quite well-placed but are very wary of over-committing until they see what happens in the new year. We don’t expect any tickle until the end of spring, simply because the banks have got their own issues, and trading for most firms is a lot worse than even if their balance sheets were sorted out because the conditions for lending are so tight. It’s difficult out there.”
Mr Egglenton said the audit and forensic divisions had performed well over the year but the final quarter had been “tough”. He said: “This year so far I’m told the national picture is about flat and we are slightly down. To be honest if we got to the end of December if things are flat for us then that would be a good result.”
He said the difficulties in the auto and manufacturing industries had made the West Midlands economy a particularly difficult place in which to operate.