The Decision Behind the Cut: How Deloitte, KPMG, EY & PwC Choose Who to Let Go
Getting laid off from a Big 4 firm while receiving a "Meets Expectations" performance rating feels contradictory. For many people caught in the 2023–2025 restructuring waves, that's exactly what happened — strong performers with solid reviews were let go, while less productive colleagues in different service lines kept their jobs.
Big 4 layoffs are mostly structural decisions, not performance verdicts. Being laid off is not the same as being told you're bad at your job — even if it feels that way.
Structural Decisions Come First
The starting point for any Big 4 restructuring is not a performance ranking. It's a service-line or practice-area decision: which parts of the business are over-resourced relative to current and projected client demand?
When Deloitte decided to reduce government consulting headcount, or when PwC restructured its technology implementation group, the decision was made at the leadership level about which practice areas would shrink. Individual performance reviews came later — and for many people, were essentially irrelevant to the outcome. If your division was designated for reduction, the question of whether you specifically would be included was secondary to the structural decision that your team was going to be smaller.
Grade-Level Targeting
Within a designated practice area, firms typically target specific grade levels rather than spreading cuts evenly across seniority. The most common pattern in the 2023–2025 cycle was to cut associate and manager grades in advisory — the levels where utilisation drops most visibly when client work dries up. Senior managers and directors were less frequently targeted in early rounds.
However, as the cycle deepened, cuts reached partner level. KPMG's decision to cut approximately 100 US audit partners in 2024–25 — around 10% of its US audit partnership — was unusual and signals that structural pressure had reached a level where even the highest tier of the pyramid was not protected. This kind of partner-level cut happens when a practice area's economics are fundamentally challenged, not just temporarily soft.
How Individual Selection Works
Once a structural decision is made and grade levels are targeted, firms use a combination of factors to identify which individuals within those cohorts will be let go:
Utilisation rates: Individuals who have been underutilised — few billable hours, sitting on the bench — are more likely to be selected than those with full project pipelines.
Performance ratings: Lower performance ratings increase the probability of selection, but high performers are not immune if their practice area is being restructured. "Meets Expectations" with high utilisation has been sufficient to retain people; "Exceeds Expectations" with low utilisation has not always protected them.
Specialisation alignment: Individuals whose skills are aligned to growing areas (AI, cybersecurity, technology risk) are less likely to be cut even within a restructuring practice area. Firms try to protect the human capital they'll need to rebuild.
Headcount quotas: Practice area leaders are often given a headcount target rather than a list of names. They then use the above factors to identify who goes — which means the decision has a degree of local discretion that can feel arbitrary.
The Role of Attrition Modelling
One underappreciated factor in Big 4 layoff decisions is the failure of attrition modelling. Firms plan headcount around an expected annual attrition rate — historically 10–15% at junior and mid levels. When attrition drops significantly (as it did during 2020–2022 when the job market was uncertain), firms accumulate surplus headcount faster than their models anticipated. By the time the decision to cut is made, the gap between planned and actual headcount is large enough to require active reduction rather than a gradual correction through natural turnover.
This is why people who joined the firms during the boom years of 2020–2022 were disproportionately affected in the 2023–2025 cuts. They were the headcount added on top of what the firm's long-term utilisation economics could support — and when the correction came, they were the surplus.
What This Means for Current Employees
Stay utilised. Visible, high-billing work is the strongest protection. Periods of being on the bench — even briefly — increase your exposure during a restructuring.
Develop skills in growing areas. AI, technology risk, and cybersecurity expertise signals alignment with where the firm is going. Firms try to retain the people they'll need to rebuild.
Stay connected across practices. Internal transfers to growing service lines can protect against cuts in a declining one — but you need relationships to make that move.
Don't over-interpret a performance rating as protection. A good review helps at the margin but won't save you if your practice area is designated for reduction.
The Bigger Takeaway
If you've been laid off from Deloitte, KPMG, EY, or PwC, the most important thing to understand is that the decision was almost certainly structural, not a verdict on your ability. The firms that cut you in 2024 may be recruiting in adjacent areas in 2025. Staying connected to where they're hiring — even after a layoff — is worth doing.
Being laid off from a Big 4 firm is not a career ending event. It's a structural correction that happened to include you. The next step is understanding which doors are open — and walking through one of them.
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