KPMG slashes staff as ‘challenges created by our own failings’ start to bite

KPMG chief executive John Sams said 27 partners and 360 employees will be cut this week as the scandalised firm deals with a significant decline in its consulting business and the impending loss of audit work following the whistleblower scandal.

“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,” Sams said in a statement Monday morning.

Sams informed KPMG’s 9,000 employees in an all-staff call at 10.30 this morning.

The KPMG statement included references to its 2026 financial results which reported that revenue declined slightly to $2.26 billion due to a 17 per cent plunge in its largest business, consulting, which is bearing the brunt of these cuts. KPMG has been in turmoil since a whistleblower revealed partners of the firm had accessed confidential client data to win new business, a serious breach of trust.

The fallout from the scandal is also starting to impact on its business.

“We also recognise the challenges created by our own failings, and the work we must continue to do to rebuild trust,” Sams said.

“We need to be clear about the outlook. We expect difficult market conditions to continue in FY27 (financial year) and beyond.”

KPMG partners are already feeling the impact with the firm reporting that average equity partner pay dropped 13 per cent last year.

Consulting is expected to decline further this year and the 11 per cent growth in audit revenues could reverse as clients like Lendlease pursue plans to dump KPMG as their auditor.

Macquarie Group has also signalled that KPMG’s win of its $70 million a year business is being reviewed.

It adds to a tough environment for all of the consulting giants which have been cutting staff this year.

“Economic growth is expected to remain subdued until at least 2028, affecting client investment and extending decision-making timeframes. The professional services sector is also changing rapidly as client expectations evolve, AI reshapes the way services are delivered and government spending on consultants remains lower,” Sams said.

“While these conditions are likely to persist, we remain focused on what we can control. We will continue to monitor performance closely, act when needed and consider carefully how the firm needs to be set up for the future.

KPMG has been under siege after admitting that some of its staff accessed confidential information from corporate clients to win business – a serious breach of trust.

Auditors require unfettered access to customer information to do their work which is essential to the integrity of financial markets.

KPMG has already sacked one partner over the scandal, former chief operating officer Eileen Hoggett, while others have resigned over the matter, but with multimillion dollar retirement packages intact.

Hoggett was sacked with immediate effect, and no retirement payment, after the law firm Allens uncovered her emails confirming printouts of the Lendlease documents had been stored in her locker, and shared with other staff bidding for new business.

“Several internal and external reviews will be completed in the coming months. Their findings will inform the next phase of our Action Plan and help ensure we take all necessary action,” Sams said on Monday.

“We know there is more to do, and we will continue that work with openness, care and determination – focused on supporting our people, serving our clients and building a stronger, more trusted firm for the future.”

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