Scandal-hit KPMG Australia to cut nearly 400 jobs, warns of difficult market

KPMG Australia, embroiled in scandal over the misuse of confidential client information, said on Monday it would cut about ‌5% of its workforce, affecting 27 partners and around 360 employees, and warned of difficult market conditions next year.

Most of the headcount reduction will take place in its consulting and business services divisions. KPMG Australia CEO John Sams, who only took the helm last month, said in a statement that the firm recognised "challenges created by ‌our own failings, and the work we must continue to do to rebuild trust."

The firm has been under intense scrutiny from the Australian government and ‌blue-chip clients since whistleblower allegations came to light in March that its staff used inside information to win lucrative audit contracts. It is the latest of a run of scandals in the sector and last month the Australian government said it was considering breaking up the Big Four accounting firms — KPMG, Deloitte, EY and PwC.

KPMG Australia also said on Monday that it ⁠expected economic growth ​to remain subdued until at least ⁠2028, weighing on client investment and extending decision-making timeframes. "While these conditions are likely to persist, we remain focused on what we can control," Sams said.

The scandal has triggered a leadership ⁠overhaul, with its former CEO, audit boss and chairman, as well as senior audit partners departing. KPMG Australia's overall revenue slipped 1% to A$2.26 billion ($1.6 billion) in the year ended June ​2026, as the loss of government contracts contributed to a 17% slump in consulting revenue.

However, four of its five divisions posted revenue growth. Revenue ⁠rose 3% in the deal advisory and infrastructure division, 11% in both the tax and legal, and audit and assurance businesses, and 6.4% in the mid-market and private division. Average pay for ⁠equity ​partners fell 13% for the year in the wake of the scandal and as KPMG reviewed its cost base.

KPMG Australia has agreed not to bid for any new federal government work until September 30, while reviews into the firm's governance, culture, ethics and integrity are underway, the government said in ⁠June. The Big Four are currently regulated as partnerships rather than companies, which means they are not subject to supervision by Australia's corporate regulator. But that ⁠could change as part of reforms flagged ⁠by the Australian government.

A tax leaks scandal at peer PwC in 2023 triggered parliamentary inquiries though most recommendations have yet to be implemented. KPMG Australia also said it would simplify parts of its structure to create more integrated teams ‌and align more closely with ‌its global advisory services.

($1 = 1.3943 Australian dollars)