As of the end of July, the rumor was that KPMG Australia would be letting go of as many as 1,000 people and a few dozen partners as it cleans up after a reputationally devastating audit scandal. Like their competitors at PwC experienced when they underwent their own scandal in 2023, the fallout wouldn’t be limited strictly to the service line at the center of the drama (“The planned cuts, which will be the hardest felt within the advisory business, are in response to the revenue problem created by this scandal,” wrote AFR’s Edmund Tadros). Thus both audit and consulting have been sweating it out a bit this month waiting to find out if their name is on the dreaded to-be-axed list.
When Financial Review reported what they’d heard from sources on July 29, a KPMG spokesperson was quick to say that no decisions had been made yet and Reuters went so far as to push out a headline that almost made it sound like AFR had pulled that number out of their asses. Please, can we just get the actual number already so people can move on.
We promised an update when numbers actually come out and thank goodness, they finally have. As usual, Financial Review has the details:
KPMG will slash 5 per cent of its workforce and cut partner pay by 13 per cent in the first stage of a cost-cutting program triggered by a document-misuse scandal that is affecting future sales and has led to falling demand for the firm’s consulting services.
The big four accounting firm said the cuts would include 27 partners and 360 staff, after it reported that annual revenue for the year to June 30 fell 1 per cent to $2.1 billion. Consulting revenue dropped, but this was offset by growth in the audit, tax, and legal divisions. Average partner pay will be also cut by 13 per cent, or about $72,000, to $645,000.
Consulting revenue didn’t just drop, it plummeted by 16% according to KPMG’s 2026 revenue results published the day before AFR’s article. New CEO John Sams said this about layoffs: “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. With demand for consulting remaining weaker, most of the roles affected will be in our Consulting business. Changes to our business and the professional services landscape have also reduced the need for some roles in Business Services.”
The quote goes on and on: “Our immediate focus is on treating everyone impacted with care, dignity and respect. We are providing practical support and making wellbeing support central to the process. We also recognise how unsettling this will be for colleagues across the firm, and we will continue to communicate openly and support them through this period of change. These changes are intended to put the firm on a more sustainable footing and ensure we remain aligned with the needs of our clients. We will keep assessing the operating environment and respond thoughtfully as circumstances change.”
So it sounds like a bunch of consulting people would have been cut regardless. Audit revenue was up 11%, we’ll have to wait until next year to see this year’s drama reflected in their revenue figures.
The firm expects difficult market conditions to continue into FY27 and beyond, said Sams in the revenue press release.
