KPMG Australia Plans 5% Workforce Reduction in Response to Scandal and Dismal Growth Projections
KPMG Australia is set to reduce its workforce by approximately 5% as the firm grapples with the repercussions of a scandal involving confidential client information and a challenging economic outlook. The layoffs will impact 27 partners and around 360 employees, primarily within consulting and business services. This decision follows a leadership overhaul amid allegations that staff used insider information to secure lucrative audit contracts, which have drawn scrutiny from the Australian government and major corporate clients.
John Sams, who assumed the role of CEO last month, acknowledged the difficulties facing the firm. He stated, “We recognise the challenges created by our own failings, and the work we must continue to do to rebuild trust.” KPMG Australia anticipates subdued economic growth until at least 2028, which is expected to affect client investment and extend decision-making timelines.
Revenue Decline Amid Scandal
KPMG Australia’s revenue fell by 1% to $1.6 billion for the year ending June 2026. The consulting segment saw a significant 17% drop, largely due to the loss of government contracts. Despite this, four of the firm’s five divisions reported revenue growth. Deal advisory and infrastructure revenue increased by 3%, while tax and legal, as well as audit and assurance, each saw an 11% rise. The mid-market and private division also experienced a revenue increase of 6.4%. Average pay for equity partners decreased by 13% as the firm navigated the fallout from the scandal and reassessed its costs.
Increased Government Scrutiny
KPMG Australia has agreed to refrain from bidding for new federal government contracts until September 30. The Australian government announced in June that it is conducting reviews into the firm’s governance, culture, ethics, and integrity. These developments coincide with discussions about potential reforms in the accounting sector, including the possibility of breaking up the Big Four firms—KPMG, Deloitte, EY, and PwC. Currently, these firms operate as partnerships and are not subject to oversight by Australia’s corporate regulator, a situation that may change under the proposed reforms. The sector has faced multiple controversies, including a tax leaks scandal at PwC in 2023, which has led to parliamentary inquiries, though many recommendations remain unimplemented. Alongside workforce reductions, KPMG Australia plans to simplify its structure to create more integrated teams aligned with its global advisory services.
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