KPMG Headquarters

The retreat from diversity, equity, and inclusion (DEI) initiatives continues to gain momentum, with consulting firms increasingly joining the exodus. The latest to follow suit is consulting giant KPMG, making it the second of the so-called 'Big Four' firms to step back from DEI commitments.

This move comes in the wake of similar actions by Deloitte and appears to align with the broader political climate, particularly the influence of Donald Trump's administration, which has been critical of such initiatives, labelling them as 'budget-wasting' government projects.

Quietly Removing DEI Objectives

As first reported by the Financial Times, KPMG CEO Paul Knopp informed employees via an internal memo that the company would be shutting down its 'Accelerate 2025' programme. This initiative had originally set out to ensure that half of the firm's partners and managing directors came from underrepresented groups by this year.

'The legal landscape surrounding diversity, equity, and inclusion efforts has been shifting via executive orders and in the courts,' Knopp wrote in an email to the company's 40,000-strong workforce last week.

In addition to scrapping Accelerate 2025, KPMG has also quietly removed its annual 'transparency reports', first introduced in 2020. These reports documented the firm's progress in increasing representation among women and minority groups.

A separate report by Business Insider quoted an anonymous KPMG employee stating that the firm would no longer set forward-looking, metric-based goals related to protected characteristics such as race or gender. The same source added that the firm aimed to ensure its website reflected its current policies, which may explain the silent removal of DEI-related content.

How Are the Rest of the 'Big Four' Holding Up?

Before KPMG's retreat from DEI in the US market, Deloitte had already made similar adjustments. Employees were instructed to remove preferred pronouns from emails and other communications, a move the company justified as aligning with 'emerging government client practices and requirements'. Additionally, Deloitte ended its annual diversity report and scaled back broader DEI initiatives.

PwC USA, meanwhile, has maintained its DEI programmes, even announcing a recent three-day seminar that barred white and Asian applicants from attending. PwC's Career Preview event, scheduled for June, is designed to connect prospective employees with the firm's staff, with travel and accommodation costs covered for participants.

In contrast, Ernst & Young (EY) has shown no signs of scrapping its DEI commitments. This stance may have played a role in the Department of Housing and Urban Development's recent decision to cancel a $3 million contract with the firm. The contract was intended to support the implementation of executive orders issued by the Biden administration.

Why Are Consulting Firms Rushing to Scrap DEI Initiatives?

Consulting firms, particularly the 'Big Four', maintain extensive ties with the US government. Deloitte and KPMG rank among the top consulting firms with government contracts, alongside Bain & Company, McKinsey, and Boston Consulting Group (BCG).

There is a growing emphasis on aligning hiring strategies more closely with government interests. In November 2024, KPMG appointed Patrick Ryan as managing partner of its Washington, DC office and leader of its US federal sector, further strengthening its position within the government consulting space.

These firms play a critical role in supporting government operations, offering expertise in financial management, risk assessment, cybersecurity, and regulatory compliance. Their ability to analyse vast amounts of data, streamline bureaucratic processes, and implement technology-driven solutions enhances the efficiency of federal, state, and local agencies.

Additionally, consulting firms provide independent audits and assessments that promote transparency and accountability, ensuring responsible use of public funds.

What Lies Ahead for Consulting Firms and Federal Contracts?

Beyond operational and financial consulting, these firms contribute to policy implementation and programme development, bridging the gap between government initiatives and private sector best practices. Whether modernising outdated IT infrastructure, improving public health programmes, or strengthening national security measures, firms like Deloitte and KPMG continue to play a pivotal role in shaping government efficiency.

Their extensive experience working with public and private organisations positions them as key partners in helping the US government navigate evolving economic, technological, and regulatory challenges. As the landscape shifts, consulting firms will likely continue recalibrating their policies to align with political and legislative trends, ensuring their sustained influence within federal agencies.

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