KPMG Australia will cut 27 partners and approximately 360 staff — about 5% of its workforce — in the first phase of a restructuring triggered by the fallout from an audit leaks scandal and a broader slowdown in consulting demand. The job losses, announced by new chief executive Andrew Yates, are expected to be just the beginning of a deeper cost reduction program.
KPMG Australia has confirmed it will shed 27 partners and around 360 employees, citing lower revenue from lost contracts following the highly publicised document misuse scandal and a softening in the consulting market. The cuts represent roughly 5% of the firm's local workforce.
New CEO Andrew Yates, who took the helm earlier this year, described the decision as a response to “challenges created by our own failings” as well as external market conditions. The firm is revamping its structure to streamline operations and win back client trust.
The job losses are understood to be the first wave of a broader cost reduction program. Sources close to the firm have indicated that further cuts could follow as KPMG works to rebuild its reputation and client base.
The scandal, which erupted last year, involved allegations that KPMG partners leaked confidential information about the Australian Taxation Office's audit plans to clients. The ensuing investigation led to the departure of several senior partners and the loss of multiple government contracts, including work with the Australian Securities and Investments Commission and the Department of Defence.
KPMG's troubles have been compounded by a wider downturn in the consulting sector, as corporations and governments tighten spending. Rivals PwC, Deloitte, EY, and McKinsey have also announced job cuts in recent months, though KPMG’s reductions are the most directly tied to a regulatory scandal.
Affected employees will be offered redundancy packages and support services, according to the firm. The cuts span all levels of the organisation, from administrative roles to senior advisory positions.
The announcement has drawn sharp criticism from unions and some politicians, who argue that the firm’s executives should bear more responsibility for the misconduct rather than rank-and-file staff. The Australian Council of Trade Unions called the cuts “a betrayal of workers who played no part in the wrongdoing.”
KPMG’s leadership has acknowledged the pain of the restructuring but insists it is necessary for long-term stability. “We are taking decisive action to address our challenges and reposition the firm for sustainable growth,” Yates said in a statement.
Investors and industry observers are watching closely to see whether KPMG can regain lost contracts and rebuild its reputation, or whether the job cuts signal deeper structural problems in the Big Four consulting model.
Analysis
Why This Matters
- The job cuts signal the severe financial and reputational consequences of corporate misconduct, particularly for professional services firms that rely on trust.
- Affected workers and their families face immediate financial uncertainty, with around 380 people losing their jobs in a softening labour market for consulting.
- The scandal and subsequent restructuring may reshape Australia's consulting landscape, with clients demanding greater transparency and accountability from Big Four firms.
Background
KPMG Australia’s troubles began in 2023 when whistleblowers revealed that partners had improperly shared confidential information from the Australian Taxation Office about audit plans for clients. The firm was found to have breached professional standards, leading to the resignation of several senior partners and the loss of lucrative government contracts.
A parliamentary inquiry followed, during which KPMG executives faced tough questioning about the firm’s culture and governance. The scandal came just months after the resignation of PwC’s Australian CEO over a separate tax leaks scandal, highlighting systemic issues in the consulting industry.
KPMG’s new CEO, Andrew Yates, was appointed in early 2024 with a mandate to restore trust and reshape the firm. The job cuts announced today are the first major structural change under his leadership.
Key Perspectives
KPMG leadership: The cuts are a necessary response to lost revenue and a weaker consulting market. The firm is taking responsibility for its failings and restructuring to become more competitive and ethical.
Affected employees and unions: Partners and senior executives who were involved in the scandal should face consequences, not junior staff who had no role in the leaks. The union argues that the firm is unfairly shifting the cost of management failures onto workers.
Industry critics and regulators: The scandal underscores the need for stronger oversight of the consulting industry. Some argue that the Big Four model, which combines audit and advisory services, creates inherent conflicts of interest. The cuts may be a sign that the market is finally forcing accountability.
What to Watch
- Further job cuts: KPMG has indicated this is just the first wave; watch for additional reductions or office closures in coming months.
- Regulatory action: The Australian Securities and Investments Commission and other bodies may impose fines or further sanctions on KPMG, which could deepen the firm’s financial strain.
- Client reacquisition: The firm’s ability to win back government and corporate contracts will be a key indicator of its long-term viability.