KPMG Australia has turned to its parent organisation for financial support and laid off hundreds of workers following a damaging audit scandal at the Big Four firm.
The Australian arm announced in its annual results that it will cut its workforce by five per cent and reduce partner pay by 13 per cent amid difficult trading conditions.
The firm cited continued economic weakness, difficult market conditions, and the fallout from misconduct involving the misuse of confidential data to win audit contracts.
“KPMG has reviewed its costs and future workforce needs in response to continued economic weakness, difficult market conditions and the impact of the firm’s conduct and whistleblower matters,” the firm said in its results.
KPMG Australia executive John Sams said: “With demand for consulting remaining weaker, most of the roles affected will be in our consulting business.”
Sams added that “changes to our business and the professional services landscape have also reduced the need for some roles in business services.”
A total of 360 employees and 27 partners have been let go in the initial round of cuts, which is reportedly the first stage of a broader cost-cutting exercise known as Project Vector.
Senior staff at the firm were found to have leaked documents internally to generate new business, and subsequently mishandled a whistleblower complaint relating to that conduct.
The outcry prompted public sector bodies across Australia to freeze new contracts with the company, while some of its largest corporate clients have also walked away.
Around 75 partners have left since the scandal first became public in March, out of a total Australian workforce of approximately 9,000 people, including around 700 partners.
The division has reportedly approached KPMG International requesting “a range of support” to help it weather the crisis, including financial assistance in order “to remain solvent”, according to ABC Australia.
The scandal has compounded three consecutive years of declining revenue, with the 2026 financial year seeing revenue fall one per cent to AUD $2.25bn, equivalent to approximately £1.18bn.
Claudine Cassar, a former Deloitte partner and writer on corporate culture, told City AM the firm’s revenues “are likely to deteriorate further”, particularly in audit work.
Despite an 11 per cent uptick in audit revenue for 2026, more recent client departures have not yet been reflected in the figures and are expected to weigh on results from 2027 onwards.
Property developer Lendlease, which in June ended a 68-year relationship with KPMG, was among those to leave after senior staff used confidential information to win around AUD $10m in additional fees from the company.
Cassar said KPMG Australia “is now under pressure because of the revenue covenants it committed to [with its banks] when it was booming, which could make it very difficult to obtain more bank finance.”
KPMG International, registered in England, oversees the policies and procedures that all member firms across the world must follow, even though each national arm operates independently.
Gary Wingrove, the current global chief operating officer and incoming global chairman and chief executive from October, previously led KPMG Australia between 2013 and 2021.
Cassar argued that “allowing a major KPMG member firm in an economy as significant as Australia to become insolvent would cause enormous reputational damage to KPMG globally.”
“In my view, they do not really have a choice other than to provide the cash,” she added, underlining the pressure on KPMG International to act decisively.
When approached for comment, KPMG International said they “wouldn’t be able to comment on financial arrangements between KPMG International and firms.”