KPMG Australia is cutting hundreds of jobs and reducing partner remuneration as the professional services giant restructures in response to weaker consulting demand and the continuing fallout from its client data scandal.
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The Australian arm of the Big Four firm will remove 27 partner positions and around 360 staff roles, with most of the affected employees expected to come from consulting and business services.
The cuts represent roughly 5 per cent of KPMG Australia’s workforce and come as the firm enters a difficult period in which both market conditions and damage to its reputation are weighing on its ability to win new work.
KPMG Australia recorded revenue of $2.257 billion for the financial year ended June 30, down about 1 per cent from the previous year.
New chief executive John Sams said the business had faced a challenging year, pointing to softer consulting demand, changes across the professional services industry and the consequences of the firm’s own conduct.
The restructuring comes as KPMG continues to deal with allegations surrounding the use of confidential client information by some of its partners.
The claims have since become the subject of a federal inquiry, with current and former KPMG partners appearing before the investigation this month.
The scandal has already had a significant commercial impact. KPMG has struggled to retain a number of government engagements and agreed to stop pursuing new federal, NSW and Victorian government work until the end of September. That pause has now been extended while a review of its public sector work remains outstanding.
KPMG’s latest financial figures show the pressure is particularly acute in consulting. Consulting revenue fell 17 per cent to $632 million, a sharp decline from the division’s peak of more than $1 billion in FY23.
Other parts of the business performed more strongly, with audit revenue increasing 11 per cent to $405 million.
KPMG Australia has about 9000 employees and roughly 700 partners. Around 75 partners have left since the scandal became public in March. Partner remuneration has also been reduced, with average equity partner pay falling 13 per cent to $645,000.
The workforce reduction is part of a broader cost review known as Project Vector. Further reductions could follow, with the firm still required to complete consultation processes involving some employees and further changes expected within audit after the current busy period.
Sams said KPMG recognised that the firm needed to address the consequences of its own failures while adapting to a professional services market being reshaped by technology and changing customer demand. For the business, the immediate priority is increasingly about protecting its existing client base rather than relying on a rapid return to new contract wins.
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