‘Our own failings’: Scandal-hit KPMG Australia to cut nearly 400 jobs, warns of difficult market

[SYDNEY] KPMG Australia, embroiled in scandal over the misuse of confidential client information, said on Monday (Aug 24) it would cut about 5 per cent of its workforce, affecting 27 partners and around 360 employees, and warned of difficult market conditions in 2027.

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 in July, 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 in July 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’s total revenue slipped 1 per cent to A$2.257 billion (US$1.62 billion) in the year ended June 2026, as the loss of government contracts contributed to a 17 per cent slump in consulting revenue.

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However, four of its five divisions posted revenue growth. Revenue rose 3 per cent in the deal advisory and infrastructure division, 11 per cent in both the tax and legal, and audit and assurance businesses, and 6.4 per cent in the mid-market and private division.

Average pay for equity partners fell 13 per cent 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 Sep 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 KPMG’s global advisory services. REUTERS