KPMG Australia plans to cut 5pct of jobs, warns soft conditions to persist
SYDNEY: KPMG Australia said on Monday it plans to cut about 5.0 per cent of its workforce, mainly in its consulting and business services divisions, affecting 27 partners and around 360 employees, and warned difficult market conditions would continue next year.
KPMG Australia will lay off five percent of its workforce and cut partner salaries by 13% in response to a decline in audit consulting revenue, following a major audit scandal. The Australian subsidiary of KPMG, part of the Big Four accounting firms, is expected to maintain moderate growth for at least two years after the scandal.
The controversy emerged after allegations surfaced that senior audit partners had used confidential client documents to secure new contracts. This, combined with accusations that the firm negligently handled a whistleblower's report, has sparked political turmoil and led to the departure of most top executives in Australia. The company announced the dismissal of 360 employees and 27 partners, primarily in the consultancy division, on Monday.
KPMG plans to restructure some teams, including its operations for medium-sized enterprises and transactions, to better align with its international services. The firm employs around 9,000 people in Australia. In addition to layoffs, KPMG plans to reduce partner salaries by 13%, due to unfavorable economic outlooks and reduced government contracts.
This salary cut, which may result in a nearly 17% drop in audit consulting revenues for the year, will likely cause a 1% decline in the firm's total revenues for the fiscal year ending in June, according to estimates. KPMG executives visited the company's offices in Sydney, Melbourne, and Brisbane in recent weeks to meet with partners ahead of the restructuring announcement.
KPMG CEO John Sams stated that growth is expected to remain moderate until at least 2028, driven by the adoption of artificial intelligence by clients and the impact of the audit scandal. KPMG International CEO Gary Wingrove and KPMG Global Executive Director Bill Thomas have also visited Australian offices in the past weeks to discuss the restructuring with partners.
The company is set to present several internal and external reviews over the coming months, which will inform its next steps following the scandal.
Written by urgent.news from Expansion ES's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
