KPMG to cut 27 partners and around 360 staff as revenue declines
KPMG Australia will cut 27 partners and about 360 employees, roughly 5 per cent of its workforce, as the firm grapples with lower revenue and the fallout from an audit leaks scandal. The cuts will primarily hit its consulting and business services divisions.
The announcement came as the firm reported its annual revenue fell one per cent to $2.5 billion in fiscal 2026. ABC Australia reported the revenue decline from $2.28 billion the previous year to $2.26 billion, while PerthNow put the figure at $2.5 billion. The discrepancy could reflect different reporting periods or accounting treatments.
New chief executive John Sams said the firm expected difficult market conditions to continue in financial year 2027 and beyond. He attributed the job cuts to "continued economic weakness, difficult market conditions and the impact of the firm's conduct and whistleblower matters," according to ABC Australia. PerthNow reported that a review of costs, workforce, and the impact of the firm's conduct and whistleblower matters led to the decision.
"This is not a decision taken lightly, and we know it will have a very real impact on people," Mr Sams said in a statement, as quoted by ABC Australia.
Revenue decline and business performance
The consulting business saw a 16.9 per cent decrease in revenue, which PerthNow attributed to soft market conditions and reduced use of consultants by governments. In contrast, the audit and assurance arm grew 11 per cent, and tax and legal grew 10.9 per cent. Mr Sams noted that four out of five businesses grew, according to PerthNow.
Average equity partner remuneration fell by 13 per cent on the prior year, PerthNow reported.
Scandal context and government contracts
KPMG has been banned from applying for federal government contracts until at least the end of September, when the finance department is expected to complete its own review of the firm's conduct. Several state governments have also put KPMG on ice, according to PerthNow.
The audit leaks scandal stems from allegations that KPMG audit partners misused confidential client data and mishandled a whistleblower's complaint. ABC Australia reported that in March, Labor senator Deborah O'Neill shared with parliament allegations that confidential board papers from Lendlease were used to support bids for major audit tenders for Westpac and Dexus. Earlier this month, current and former partners were questioned by a federal inquiry.
Former CEO Andrew Yates and chair Martin Sheppard lost their jobs as a result of the scandal, according to PerthNow.
Restructuring and future plans
KPMG will also restructure its operations. ABC Australia reported that the mid-market and private deals team will join the consulting division, with changes to advisory. The firm will consult on a small number of award-based roles.
Mr Sams said the changes were "an important step in the longer work of renewing and rebuilding our firm," and that internal and external reviews would be completed in the coming months, with findings informing the next phase of the action plan. "We know there is more to do," he added, as quoted by both outlets.
KPMG has 297 active federal contracts worth $653 million, according to both outlets.