KPMG Consulting Announces Workforce Reductions

KPMG Consulting, Inc. has announced that it plans to reduce its workforce by approximately 300 to 400 employees, in order to balance workforce capacity with market demand for services. The action impacts approximately three percent of the company's worldwide workforce with very small impacts in any one area. The charge associated with this reduction will be recorded in the December 2001 quarter and will be in the range of $15 million to $20 million.

The Company also announced that approximately 300 employees had chosen to take part in its workforce alternatives program either by taking a voluntary leave of absence for three to six months, agreeing to work on call or converting to a part-time status. These actions were completed earlier in October 2001 when the Company provided its employees the opportunity to adjust their own work schedules consistent with their personal and professional needs and world events. The program will also enable KPMG Consulting to add back key professionals as market demands increase.

"While we remain comfortable with our business model, it is vitally important that we continue to balance the market demands from our clients with the capacity of our workforce," said Rand Blazer, Chairman and Chief Executive Officer, KPMG Consulting. "We continue to take the actions that promote stability in our workforce, manage workforce size and skill composition, and allow us to meet the systems integration needs of our clients while managing the performance of the company."

Yesterday, KPMG Consulting released earnings for its first fiscal quarter, after the market close. The firm reported revenue of $609 million, down from an anticipated $679 million. A large write-off of $80 million reduced what would have been a small profit to a $57.6 million loss.

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