The ever-reliable Australian Financial Review said yesterday that, per their sources, KPMG is planning to let “dozens” of partners and 1,000 staff go in September as the firm tries to recover from a messy scandal. That works out to about 10% of the workforce and whatever percent “dozens” is out of 700-ish partners.
Details of the job cuts were shared with selected partners this week, along with a warning to unhappy members of KPMG Australia’s 700-strong partnership: support the new local leadership team of chief executive John Sams and chairman Michael Ebeid or leave.
Officially, KPMG told AFR that “it was still reviewing its ‘operating model, cost base and workforce needs’ for 2026-27 and no decisions had been made regarding specific cuts.” Let’s add the second part of the quote in here because ugh:
[Any cuts] would be communicated to staff once they were and the firm was “determined to make responsible decisions that position the firm for a sustainable future”, he noted.
Yeah thanks for that. Here we were wondering if they’d just abruptly yoink everyone’s laptop access and say nothing.
Shortly after the AFR story was published Reuters quickly put up a story of their own in which a KPMG spokesperson is quoted as saying “nuh uh” (paraphrased). That’s the narrative Reuters decided to roll with rather than focusing on the prospect of 10% of KPMG’s workforce getting axed:
“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 the firm was continuing to evaluate “a range of options to ensure the firm remains well positioned for the challenges ahead.”
Going back to AFR’s story, it sounds like what they wrote aligns with what the KPMG spokesperson said to Reuters. Cuts need to happen, cuts were delayed due to a serious leadership shakeup (and tedious ongoing parliamentary inquiries), cuts can now happen.
The planned cuts, which will be the hardest felt within the advisory business, are in response to the revenue problem created by this scandal. While partners were told that job cuts may be needed earlier this month, KPMG’s leadership had stalled making any decisions until a permanent CEO was in place. With [John] Sams’ appointment, it can now proceed with the redundancies.
He plans to pull the trigger within a month. But the firm is moving more slowly than it usually would on the cuts because of several factors: it is the audit division’s busy season; the firm’s leadership is deep in preparations for a second hearing of the joint parliamentary inquiry into the scandal, and KPMG International executives are visiting.
Mind you John Sams’ appointment was only announced mere days ago so yeah, the firm might need a few days or weeks to finalize the red line on Potential_Firing_List_final_FINAL.xlsx.
Oh and just by the way, one of Sams’ first tasks as CEO is to “implement cost savings.” It’s safe to assume that there will be layoffs, it just remains to be seen how many and when. AFR had reported a few weeks ago that it was looking more like hundreds of layoffs were coming, though one source did tell them at the time the number would be closer to 1,000.
Guess all we can do is wait and see.
