KPMG Australia weighs cutting 1,000 jobs after audit scandal

By Claire Bennett · 2026-07-30

A firm under pressure

KPMG Australia employed 8,967 people and was led by 684 partners for the year ended 30 June 2025verifiedVerified Source: kpmg.com.^[1] That headcount now sits at the centre of a high-stakes workforce review, with the Australian Financial Review reporting that roughly 1,000 staff and dozens of partners could be cut, more than 10 per cent of the total.^[9] KPMG said no final decisions on roles have been made.

The potential cuts would fall hardest on the advisory division, which had been KPMG Australia's fastest-growing arm before whistleblower allegations upended the firm's standing with government clients, regulators and major private sector names alike. Reports of the review describe softening client demand and an uncertain pipeline in that division.

What KPMG has said

KPMG Australia has confirmed it is reviewing its operating model, cost base and workforce needs, but has been careful to state that no decisions on specific roles have been finalised. The review reflects a broader effort to realign costs with revenues following the procurement suspensions and reputational damage that have squeezed the firm's revenue base since mid-2026.

The financial pressure on partners is becoming concrete. Profit distributions are expected to fall around 20 per cent in the 2026 financial year, measured against average distributions of $717,000. For a partnership structured around shared economics, a cut of that size compresses individual returns sharply and puts pressure on the firm's leadership to demonstrate a credible recovery path.

Government bans lock out public sector work

The procurement restrictions that have shut KPMG out of new government work are now operating across multiple jurisdictions at once. A Procurement Policy Note from the Commonwealth Department of Finance advises that KPMG will not bid for any new Commonwealth work until 30 September 2026.verifiedVerified Source: finance.gov.au^[4] Western Australia reached the same arrangement, with the Department of Treasury and Finance and KPMG agreeing the firm will not tender for any new WA government work from 16 June 2026 until at least that same date.^[5]

NSW moved in parallel. The NSW Government's Administrative Review Panel directed that KPMG Australia will not bid for any new New South Wales government contracts until 30 September 2026.^[6] Victoria followed on 27 July, when KPMG agreed not to bid for new Victorian government work until the same date, Bloomberg Tax reported.^[8] Taken together, the bans remove the firm from competing for new public sector mandates across the federal government and three of the largest states for the duration of the review period. For a consultancy of KPMG's scale, public sector work is not peripheral; it is structural.

Interim CEO Stan Stavros said at the time the Commonwealth ban was announced: "We have voluntarily agreed not to bid for new Commonwealth work until the review is complete, which is expected by the end of September 2026."verifiedVerified Source: kpmg.com^[3] Each jurisdiction has framed its arrangement differently, but all of them run to the same end date.

Client losses and regulatory scrutiny

The commercial damage extends beyond government. Lendlease, a construction and infrastructure group that had used KPMG as its auditor for 68 years, is ending that relationship and has put its audit to tender, Human Resources Director reported.^[10] Macquarie is reviewing the process by which KPMG won its audit contract, according to the same report.

The Australian Securities and Investments Commission is examining three registered company auditors in connection with the whistleblower allegations at the heart of the controversy. ASIC chair Sarah Court told a Senate committee that the scope could widen. “There are three registered company auditors that are currently within the scope of what we were looking at, but I have to say this is an ever-moving feast at the moment as more information comes our way,” Court said.^[11] Those allegations centre on claims that audit partners misused confidential client information to win business, conduct that, if substantiated, would represent a serious breach of the independence standards that underpin the audit function. ASIC has also called for reforms that would extend its oversight powers over audit firms, not just individual auditors.

New CEO, governance overhaul

Against this backdrop, the KPMG Australia board appointed John Sams as chief executive, effective 21 July 2026.^[2] Sams is the firm's first permanent chief executive since the previous CEO resigned as the scandal widened. His appointment came alongside a governance overhaul that included the departure of two audit partners, the appointment of the firm's first independent chair and the addition of independent directors to the board.^[7]

Sams did not soften his opening position. "I do not underestimate the task ahead but commit to our clients and people that I am prepared to be courageous, take the tough decisions and lead the changes we need to set us on the right path," he said. "The firm fell short of the standards rightly expected of us, and the accountability for these failures will continue to be implemented. We have serious work to do on our culture, our leadership and our governance and it will take resolve and endurance."^[2]

KPMG Australia announced the departure of two audit partners, the appointment of its first independent chair and additional independent directors as part of its formal Action Plan.^[7]

What comes next

The 30 September 2026 deadline for the Commonwealth procurement review is the nearest fixed point on KPMG's calendar. Whether the bans are lifted, extended or converted into something more lasting will depend on the independent review's findings and on whether the governance changes the firm has put in place satisfy the Department of Finance and its counterparts in the states.

The workforce review runs alongside all of this. A cut of 1,000 people from a firm of just under 9,000 is not a restructure at the edges; it is a reconfiguration of what the firm does and for whom. Whether Sams can execute that while holding together a partnership whose distributions are already falling 20 per cent, keeping remaining clients steady and satisfying regulators across two levels of government will decide how the firm emerges. KPMG said no final decisions on roles have been made.

Claire Bennett

Claire Bennett writes about work and workplace culture. She is interested in the gap between how organisations describe themselves and what it feels like to work inside them.