KPMG Australia is preparing for major workforce reductions and partner pay cuts as it grapples with a sharp decline in public and private sector consulting work following the audit leak scandal.
According to Reuters, the firm's Australia division is considering cutting between 200 and 1,000 staff roles and reducing partner distributions by up to 20%. The redundancies are expected to be finalised after a permanent chief executive is appointed, with Chief Financial Officer John Sams emerging as the frontrunner.
Cost-cutting measures
The professional services firm employs about 9,000 staff and 700 partners in Australia. Earlier this year, it cut 200 executive assistant roles and offshored the work to the Philippines, generating annual savings of about A$17 million.
A KPMG spokesperson said, "Our focus remains on providing high-quality service to our clients, supporting our people, and making responsible decisions that position the firm for a sustainable future."
The spokesperson added that KPMG was evaluating "a range of options to ensure the firm remains well positioned for the challenges ahead", including a review of its operating model, cost base and workforce needs.
Public sector freeze
KPMG's public sector division has agreed to pause bidding for new Commonwealth and New South Wales government contracts until the end of September.
The Australian Financial Review, cited by Reuters, said partners could face average distribution losses of about A$717,000.
Scandal continues to weigh
The consultancy remains under scrutiny over whistleblower allegations that confidential client information was used to secure lucrative contracts.
The controversy has already led to the departure of the chairman, chief executive and audit boss.
Audit leak fallout
KPMG has acknowledged shortcomings in handling the whistleblower complaint and has launched a fourth internal investigation after earlier inquiries failed to substantiate wrongdoing.
Regulatory investigation
Australia's corporate regulator launched a formal investigation into KPMG Australia in May. Last week, it expanded its review to include audit conduct complaints across the Big Four accounting firms.
The audit leak scandal became public in March after Labor senator Deborah O'Neill used parliamentary privilege to raise concerns raised by a former senior executive who filed a whistleblower complaint in 2024.