KPMG Australia has begun discussions with senior partners who could be affected by a major workforce reduction, raising fresh questions over the scale of potential job cuts at the embattled accounting firm.
The Sydney Morning Herald reported that KPMG chief executive John Sams confirmed conversations had begun with impacted partners, although no decisions had yet been made on specific roles.
The firm is expected to provide a further update next week.
Job cuts remain under review
“I have been clear in recent communications with partners and our people that we are undertaking a process to review our cost base and workforce to ensure the firm is sustainable and well positioned for the future,” he told partners in an email on Wednesday evening.
“Conversations have commenced this week with impacted partners. No decisions have been made about staff roles at this point but, as I have said in previous communications, we expect to make those decisions soon.”
Internal sources have suggested KPMG could cut as many as 1,000 roles, equivalent to around 10% of its workforce. The Australian has reported a lower estimate of about 500 positions.
KPMG, however, has continued to stress that no final decision has been made.
“We are reviewing our operating model, cost base and workforce needs. It is important to note that no decisions have been made regarding any specific measures or potential impact on roles,” a KPMG spokesperson said.
The spokesperson added that the firm was evaluating “a range of options to ensure the firm remains well positioned for the challenges ahead.”
Sams also acknowledged the uncertainty facing employees as speculation around the cuts intensifies.
“I am frustrated and sorry that we are all dealing with this speculation. I know it is unsettling for all of us, and our teams,” Sams said.
“I can’t comment any further until decisions are made but I expect to provide a further update next week.”
Regulatory investigations continue
The pressure on KPMG extends beyond its internal review of costs and staffing.
The Australian Securities and Investments Commission has expanded its investigation into the whistleblower allegations to include companies controlled by KPMG and potentially their directors.
The directors include former NSW premier Mike Baird, former KPMG CEO Andrew Yates and Martin Sheppard, who resigned amid the scandal with full retirement benefits.
KPMG is also facing investigations by ASIC, the Tax Practitioners Board, the Australian government and Chartered Accountants ANZ.
The firm remains barred from bidding for new Australian federal government contracts until September.
With partner consultations now under way, the key question is whether KPMG's review will result in the widely reported 1,000 job cuts, a smaller reduction of around 500 roles, or a different workforce strategy altogether. The answer is expected when the firm provides its next update.