KPMG Australia was once considering 1,000 job cuts; firm now confirms nearly 400 layoffs

KPMG Australia will cut about 5% of its workforce, affecting 27 partners and around 360 employees, months after the firm was reported to be considering eliminating about 1,000 positions. Most of the latest headcount reduction will take place across its consulting and business services divisions.

The cuts come as KPMG Australia deals with the fallout from a scandal involving the alleged misuse of confidential client information, while weaker demand and lower government spending on consultants weigh on its business.

The firm had denied in July that a decision had been made on the reported 1,000 job cuts. At the time, the Australian Financial Review reported that KPMG planned to eliminate about 1,000 positions, or 10% of its workforce, following the audit misconduct scandal.


KPMG then said it was reviewing its operating model, cost base and workforce needs, while stressing that no decisions had been made regarding specific measures or their impact on employees.

Meanwhile, KPMG Australia CEO John Sams, who took the helm last month, today said the firm recognised the "challenges created by our own failings, and the work we must continue to do to rebuild trust."

The firm has faced intense scrutiny from the Australian government and major corporate clients since whistleblower allegations emerged in March that staff had used confidential information to help win lucrative audit contracts.

The allegations involved the sharing of Lendlease and Optus data among KPMG staff bidding for audit work with Westpac, Dexus and Telstra.

The scandal has triggered a leadership overhaul, with KPMG Australia's former CEO, audit boss and chairman, along with senior audit partners, departing the firm. Sams, a partner from KPMG's commercial advisory and transactions practice, was appointed CEO last month.

KPMG Australia said economic growth was expected 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 firm's overall revenue slipped 1% to A$2.26 billion ($1.6 billion) in the year ended June 2026. Consulting revenue fell 17%, with the loss of government contracts contributing to the decline.

Four of KPMG Australia's five divisions, however, recorded revenue growth. Revenue increased 3% in deal advisory and infrastructure, 11% in tax and legal, 11% in audit and assurance, and 6.4% in the mid-market and private division.

Average pay for equity partners fell 13% during the year as KPMG reviewed its cost base following the scandal.

KPMG Australia has also agreed not to bid for new federal government work until September 30 while reviews into its governance, culture, ethics and integrity are underway.

The firm faces separate investigations by the Australian government, the Australian Securities and Investments Commission, the Tax Practitioners Board and Chartered Accountants ANZ.

The developments come as the Australian government considers reforms to the country's Big Four accounting firms — KPMG, Deloitte, EY and PwC. The government said last month that it was considering whether the firms' structures should be changed.

The Big Four currently operate as partnerships rather than companies and are therefore not subject to supervision by Australia's corporate regulator in the same way as companies.

KPMG Australia said it would also simplify parts of its structure to create more integrated teams and align more closely with its global advisory services.

The latest cuts therefore mark a significant reduction from the 1,000 positions previously reported, but they come as KPMG Australia continues to restructure its business following the scandal, leadership upheaval and weaker consulting demand.

With Reuter inputs