KPMG Australia will cut 27 partners and approximately 360 employees - a reduction of roughly 5% of its workforce - as consulting demand weakens amid difficult market conditions and the continuing fallout from a whistleblower scandal that has cost the firm its government contracts and put its senior leadership before a federal parliamentary inquiry.
The firm confirmed the cuts on Monday alongside annual results showing total revenue of $2.26 billion for the year ended June 30, 2026, down 1% from $2.28 billion the previous year.
New chief executive John Sams, who took over the role in July following the departure of former CEO Andrew Yates, told staff the firm expected difficult conditions to persist. "We expect difficult market conditions to continue in FY27 and beyond," Sams said. "Economic growth is expected to remain subdued until at least 2028, affecting client investment and extending decision-making timeframes." He acknowledged the firm's own conduct as a direct factor: "We also recognise the challenges created by our own failings, and the work we must continue to do to rebuild trust."
The job losses fall overwhelmingly within KPMG's consulting and business services divisions. Consulting revenue, once the firm's largest division, fell 17% to $632 million in FY2026 - down from more than $1 billion three years ago. The decline is not primarily a market-wide phenomenon: four of KPMG's five other divisions posted revenue growth, with audit and assurance up 11% to $405 million and tax and legal up 10.9% to $268 million. Average equity partner pay fell 13%, or approximately $72,000, to $645,000.
The consulting collapse traces directly to the loss of government business. KPMG has been banned from applying for federal government contracts until at least the end of September 2026, when the Department of Finance expects to have completed its own review of the firm's conduct. Multiple state governments have also suspended the firm from their own procurement panels.
The cuts follow more than two years of scrutiny over a whistleblower complaint first raised internally in 2024. In March 2026, Labor senator Deborah O'Neill shared with parliament allegations that confidential board papers from Lendlease had been used to support bids for major audit tenders with Westpac and Dexus. KPMG has been unable to retain most of its ongoing government contracts since those allegations became public. Earlier this month, current and former partners appeared before a federal parliamentary inquiry examining why the firm allegedly shared client information and failed to act on the whistleblower's concerns when they first surfaced.
KPMG Australia is a significant provider of risk advisory, actuarial consulting, regulatory compliance and governance services to the Australian insurance sector. The firm's APRA and ASIC-facing advisory work, internal audit functions, and risk management consulting engagements with major insurers represent ongoing relationships that the firm's current instability places under a degree of operational uncertainty.
The federal contract ban also has a specific insurance-sector implication. Insurers and reinsurers that hold government-related covers - including professional indemnity and D&O policies covering public sector bodies that have used KPMG for audit or advisory work - should be alert to whether KPMG's conduct in those government engagements creates any related claims exposure. The parliamentary inquiry is still active and further revelations cannot be ruled out.
More broadly, KPMG's trajectory illustrates a governance risk that management liability underwriters are watching across the professional services sector: the concentration of reputational and commercial damage that follows a whistleblower handling failure. The firm had internal processes that were triggered in 2024 and demonstrably failed to contain the issue before it reached parliament. That sequence - internal complaint, inadequate response, public exposure, loss of major client base - is precisely the pattern management liability policies are designed to address, and precisely the sequence that produces the most contested and expensive claims.
Sams pointed to underlying resilience across most of the business and said the firm remained focused on what it could control. The restructure could extend into the 2026-27 financial year.
