KPMG Australia plans to cut up to 400 jobs as scandal fallout deepens

KPMG Australia is preparing to cut up to 400 jobs by the end of November as the professional services firm continues to grapple with the fallout from a document misuse scandal and an extended federal government ban on bidding for new contracts.

The planned redundancies, internally referred to as “the reset”, would primarily affect the firm's consulting division and internal-facing business services teams. The cuts would bring the total number of jobs eliminated to around 800 out of a workforce of approximately 9,000, representing nearly nine per cent of its employees.

The consulting division, led by Brad Miller, has reportedly recorded a revenue decline of at least a third since July, adding to pressure on the firm's operations and workforce.

The latest reduction follows an earlier round of approximately 400 job cuts in August under an initiative called Project Vector, which was below the initially planned reduction of 450 positions. The firm has also reduced partner remuneration and asked dozens of partners to leave.

KPMG Australia's difficulties extend beyond its workforce restructuring. The federal government has extended its ban on the firm bidding for new government contracts until the end of February 2027, requiring it to demonstrate that it can be trusted to undertake public sector work.

The restrictions have particularly affected its public sector and defence businesses. KPMG's defence revenue, which previously exceeded $300 million annually, fell to approximately $150 million last year. The business generated less than $60 million in billings during the first four months of the 2026-27 financial year, according to the report.

The firm is also seeking to sublease two of the three floors of its Canberra office, reflecting the pressure on its public sector operations.

The financial strain has prompted expectations of support from KPMG International, which is reportedly preparing to provide financial assistance to its Australian partnership by December. Earlier estimates suggested the Australian firm could seek up to $100 million in emergency loans and relief from some or all of its annual global subscription fees. However, partners have reportedly been told that these figures are inaccurate, with revised terms yet to be disclosed.

The crisis intensified in March following allegations that audit partners had misused confidential client information and leveraged conflicted relationships to secure business. The controversy deepened as questions emerged over the firm's handling of the alleged misconduct and its treatment of the whistleblower who raised concerns.

The fallout has included the departure of executives, clients, partners and employees, alongside growing scrutiny of the firm's governance and internal controls.

A review of KPMG's public sector operations by former senior public servant Ian Watt, published in October, criticised the firm's response to the controversy as “misguided, fragmented, prolonged and, at critical points, lacked clear ownership”.

The review also estimated that KPMG had lost opportunities to secure at least $60 million in federal government work.

The firm has also lost several major audit clients. Lendlease, ANZ and IAG have ended their audit engagements with KPMG, involving annual contracts worth approximately $10 million, $24 million and $11.6 million, respectively. Macquarie has also dropped KPMG as its preferred auditor for a contract valued at approximately $95 million annually.

The restructuring comes amid wider challenges for the Australian professional services sector, where reputational damage and governance failures have affected major firms. KPMG's workforce reductions remain smaller than those experienced by PwC Australia following its tax confidentiality scandal, which resulted in significant losses in revenue, partners and employees.

As KPMG Australia attempts to stabilise its business, the latest round of redundancies signals the continuing operational and financial consequences of the controversy.