iscover KPMG Australia’s ‘rebuild’ starts with 5% headcount reduction
BusinessThe big four firm has confirmed it will be axing nearly 400 roles after a 16.9 per cent decline in its consulting revenue, driven by government contract bans and softer economic conditions.
KPMG Australia has confirmed that it will be laying off 27 partners and around 360 employees in its consulting and business services divisions, with most being in consulting, along with further consultation to run until next week on the fate of a “small number” of award-based roles, as it battles a 1 per cent decline in revenue.
This follows the firm reportedly having conversations about these cuts between 19 August and 21 August.
The 5 per cent headcount reduction follows the firm’s assessment of its cost base and future workforce needs. KPMG Australia chief executive John Sams said the reduction is to put the firm on a “more sustainable footing”, helping it continue work to rebuild and renew itself, and that it will “respond thoughtfully” as circumstances change.
“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.
“With demand for consulting remaining weaker, most of the roles affected will be in our Consulting business. Changes to our business and the professional services landscape have also reduced the need for some roles in Business Services.”
Leading up to the layoffs
Following the firm’s appearance at the Parliamentary Joint Committee on Corporations and Financial Services hearing on 14 August, it continues to face scrutiny over its treatment of a whistleblower after allegations aired by Senator Deborah O’Neil earlier this year and Treasury’s consultation paper on firm regulation.
“We also recognise the challenges created by our own failings, and the work we must continue to do to rebuild trust,” Sams said.
“Our immediate focus is on treating everyone impacted with care, dignity and respect. We are providing practical support and making wellbeing support central to the process. We also recognise how unsettling this will be for colleagues across the firm, and we will continue to communicate openly and support them through this period of change.”
This follows softer market conditions and a continued reduction in government business, which impacted consulting revenue, contributing to a 16.9 per cent year-on-year decrease in revenue for the firm’s consulting business; average equity partner remuneration also declined 13 per cent from the prior year.
Structural changes
Further changes include the firm’s amalgamation of its mid-market and private deals team with its deal advisory and infrastructure team, and the combination of its advisory team with its consulting team.
This follows the firm releasing its FY26 results, in which it reached total revenue of $2.257 billion, down 1 per cent year on year.
Sams said: “We need to be clear about the outlook. We expect difficult market conditions to continue in FY27 and beyond.”
“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.”
“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.”
Editor's note: This story has been updated since publication.
Want to see more stories from trusted news sources?Make Accountants Daily a preferred news source on Google.
