KPMG Australia boss John Sams has not ruled out further jobs carnage after announcing 27 partners and 360 employees will go this week as the accounting firm deals with a significant decline in its consulting business and the impending loss of audit work following the whistleblower scandal.
Sams told KPMG’s 9000 employees of the cuts in an all-staff call at 10.30 on Monday morning and flagged tough times ahead with the impact of the scandal in its audit business only just starting to impact on its business. He did not give any assurance this would be the end of the changes.
“We need to be clear about the outlook. We expect difficult market conditions to continue in FY27 (financial year) and beyond,” Sams said in a public statement on Monday morning.
The firm has been in turmoil since a whistleblower revealed that some of its most senior partners had accessed confidential client data to win new business, a serious breach of trust.
Several major companies have also declared they will shift to other auditors while its consulting business continues to experience an industry-wide downturn.
“After careful consideration, we have made the difficult decision to reduce our workforce and restructure parts of the firm. This is not a decision that has been taken lightly, and we know it will have a very real impact on people.”
The KPMG statement included references to its 2026 financial results, which reported that revenue declined slightly to $2.26 billion due to a 17 per cent plunge in its largest business, consulting, which is bearing the brunt of these cuts
The fallout from the scandal is also starting to have an impact on its business.
“We also recognise the challenges created by our own failings, and the work we must continue to do to rebuild trust,” Sams said.
KPMG partners are already feeling the impact, with the firm reporting that average equity partner pay fell 13 per cent last year.
Consulting is expected to decline further this year, and the 11 per cent growth in audit revenues could reverse as clients such as Lendlease pursue plans to dump KPMG as their auditor.
Macquarie Group has also signalled that KPMG’s win of its $70 million-a-year business is being reviewed.
It adds to a tough environment for all the consulting giants which have been cutting staff this year.
“Economic growth is expected to remain subdued until at least 2028, affecting client investment and extending decision-making timeframes,” Sams said. “The professional services sector is also changing rapidly as client expectations evolve, AI reshapes the way services are delivered and government spending on consultants remains lower.
“While these conditions are likely to persist, we remain focused on what we can control. We will continue to monitor performance closely, act when needed and consider carefully how the firm needs to be set up for the future.”
KPMG has been under siege after admitting that some of its staff accessed confidential information from corporate clients to win business – a serious breach of trust.
Auditors require unfettered access to customer information to do their work, which is essential to the integrity of financial markets.
KPMG has already sacked one partner over the scandal, former chief operating officer Eileen Hoggett, while others have resigned over the matter, but with multimillion-dollar retirement packages intact.
This includes former chairman Martin Sheppard, ex-chief executive Andrew Yates, and former audit head Julian McPherson, who first received the whistleblower complaint more than two years ago.
KPMG general counsel Louise Capon has also announced her retirement, as has HR boss Dorothy Hisgrove.
Kim Lawry, a former senior audit partner, resigned after new client Westpac refused to let her sign off on their financial accounts. KPMG is considering disciplinary action after the parliamentary inquiry heard that investigations by law firm Allens uncovered a screenshot on her mobile of Lendlease documents. This was one of the core whistleblower allegations that have now been substantiated.
Hoggett was sacked with immediate effect, and no retirement payment, after the law firm Allens uncovered her emails confirming printouts of the Lendlease documents had been stored in her locker, and shared with other staff bidding for new business.
No update on the ongoing investigations was provided on Monday.
“Several internal and external reviews will be completed in the coming months,” Sams said on Monday. “Their findings will inform the next phase of our action plan and help ensure we take all necessary action.
“We know there is more to do, and we will continue that work with openness, care and determination – focused on supporting our people, serving our clients and building a stronger, more trusted firm for the future.”
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Colin Kruger is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email.From our partners
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