KPMG Australia is planning to cut almost 400 jobs as the professional services industry struggles with a huge scandal involving the misuse of confidential client data and a rapid drop in consulting demand. It will cut about 5 per cent of its Australian workforce, affecting 27 partners and around 360 employees.
The job cuts are a major restructuring for one of Australia's largest accounting and consulting companies and come after a bad year of reputational damage, lost contracts and weaker economic conditions. KPMG Australia reported total revenue of about A$2.26 billion in the financial year ended June 2026, down about 1 per cent from the previous year. Although the overall decline was relatively modest, the consulting business took a much sharper hit, with revenue falling by about 17 per cent.
The consulting division is taking the brunt of the restructuring as the demand for professional advisory services has weakened. Australia's economic slowdown and the reduction of government spending on consultants and changing clients' expectations have created a more difficult environment for major consulting firms.
KPMG Australia Chief Executive John Sams warned that tough market conditions were likely to continue - and that economic growth would likely remain subdued until at least 2028. The company also pointed out the rapid transformation of professional services as artificial intelligence alters how consulting and other advisory work is carried out.
The layoffs are also related to the controversy that has engulfed KPMG Australia in recent months. The company has been under pressure since whistleblower allegations that some KPMG audit partners misused confidential client information in the effort to secure major business contracts. Allegations presented to Australia's Parliament included claims that KPMG used Lendlease board papers in relation to bids for large audit tenders involving Westpac and Dexus. The controversy has led to investigations and has put huge pressure on the firm’s leadership and relationships with clients.
The scandal has far-reaching implications for KPMG’s reputation, and the company has suffered losses due to the scandal. The firm has lost government and corporate contracts and has been frustrated by the loss or disruption of these contracts as the professional services industry has come under scrutiny. KPMG Australia has also undergone major management changes as the organisation attempts to rebuild trust with its clients, employees and regulators. The company admitted that when it first received the complaint, its initial treatment did not meet its own expectations or the standards expected by the wider community. There is also an external investigation ongoing.
KPMG's current restructuring is intended to simplify operations and put the business on a more sustainable course, management says. It will also reorganise several teams, including bringing its mid-market and private deals operations closer to deal advisory and infrastructure businesses. Its advisory and consulting structures will also be restructured in line with the firm’s larger global strategy. Further discussion will also be held on some of those award-based positions.
Despite the hard times faced by the consulting business, KPMG Australia’s consulting operation did not suffer much overall. KPMG Australia’s audit and assurance division was reported to have seen revenue growth of about 11 percent and tax and legal revenue grew by about 10.9 per cent. So the current restructuring has not been an all-encompassing collapse in the firm’s business; it is more about areas of demand that have shown a decline rather than a complete collapse at the top and bottom line.
The announcement is particularly significant for Australia’s wider professional services sector. Big accounting firms have been under increasing pressure due to conflicts of interest, consulting practices, government contracts and the leaking of confidential information. The KPMG affair has added to calls for stronger oversight of the sector and renewed debate about whether audit and consulting operations should be separated more clearly.
But employees find there is a lot of uncertainty in the restructuring. KPMG has said it is a decision that will have a real impact on affected workers and will provide practical and wellbeing support during the process. Market conditions are also difficult in the longer term, and the company has not ruled out further changes if business performance does not improve.
KPMG Australia now faces the dual challenge of managing a weak consulting market and recovering from the whistleblower controversy. The nearly 400 job cuts are a significant step in that direction, but for the long-term recovery of KPMG Australia, the firm will have to regain client confidence, navigate regulatory requirements and adapt to a professional services market that is becoming increasingly automated and customer-driven.
