'Reset' to mainly hit KPMG's partners at consulting and internal-facing business services divisions, according to reports
KPMG Australia is reportedly cutting up to 400 roles by the end of November as part of its widespread cost-cutting measures amid the fallout from its controversies involving misuse of confidential client data and its mishandling of the whistleblower matter.
The cuts were reported by the Australian Financial Review (AFR), citing two sources close to the firm who were "not authorised to speak about internal matters.
According to the report, KPMG's "reset" will cut up to 400 people, with those in the firm's consulting and internal-facing business services divisions to be hit the hardest.
Partners in the firm's public sector division are also bracing for impact, after the government extended its suspension on new federal contracts with KPMG until February 2027.
The prohibition, despite not being permanent, will require KPMG to make "lasting remediation" in order to restore government trust.
The recently announced cuts take KPMG's total redundancies to about 800 out of its 9,000-strong workforce. This includes the layoffs in August under "Project Vector," which also hit about 400 staff.
KPMG's cost-cutting crisis
The cuts at KPMG are part of widespread cost-cutting measures following dipping revenues amid its controversies.
KPMG has been accused of misusing confidential client data to win lucrative audit and consulting contracts. A government-commissioned report released last week also found that it failed to appropriately respond to whistleblower concerns.
Fallout from the scandal includes its consulting division suffering a revenue drop of at least a third since July, while its defence business only generated $150 million last year, down from more than $300 million annually, according to the AFR.
Aside from the government suspension, a number of KPMG's audit clients have dropped it following the scandal, such as Lendlease, ANZ, and Insurance Australia Group.
KPMG International is expected to come to the rescue of its Australian branch through financial support, with the AFR reporting that the Australian partnership is seeking emergency loans and waivers of all or part of its annual subscription fee for using the brand.
This won't be the first time that KPMG International has intervened in the controversy, after it was previously reported that it blocked partner exits earlier this year following a leadership exodus that saw the departures of former chief executive Andrew Yates and head of audit Julian McPherson.
