[Australia] KPMG will sack dozens of partners, 1000 staff amid audit scandal fallout
Jul 29, 2026
KPMG Australia will lay off dozens of partners and 1000 staff in September, representing more than 10 per cent of its workforce, after members of its global leadership team arrived in Australia seeking to stem the fallout from the local firm’s audit misconduct scandal.
Details of the job cuts were shared with selected partners this week, along with a warning to unhappy members of KPMG Australia’s 700-strong partnership: support the new local leadership team of chief executive John Sams and chairman Michael Ebeid or leave.
KPMG International chairman Bill Thomas and incoming chairman Gary Wingrove – a former chief executive of the local firm – held partner meetings along with Sams and Ebeid in Sydney on Tuesday and Melbourne on Wednesday to discuss the crisis. They travel to Brisbane on Thursday and have been conducting virtual meetings with other Australian partners throughout the week.
Sams, who was appointed local CEO last week, has wasted no time in pushing for dramatic changes to the firm’s local executive team, taking the unprecedented step of expelling former chief operations officer Eileen Hoggett from the partnership after finding she hid confidential Lendlease board documents in her locker.
This was among the most serious allegations by a whistleblower who claimed audit partners misused confidential client data and leveraged conflicted relationships to win work. The claims, many of which have been substantiated, and the firm’s mismanagement of them, have sparked the biggest crisis in the history of KPMG’s Australian office.
The planned cuts, which will be the hardest felt within the advisory business, are in response to the revenue problem created by this scandal. While partners were told that job cuts may be needed earlier this month, KPMG’s leadership had stalled making any decisions until a permanent CEO was in place. With Sams’ appointment, it can now proceed with the redundancies.
He plans to pull the trigger within a month. But the firm is moving more slowly than it usually would on the cuts because of several factors: it is the audit division’s busy season; the firm’s leadership is deep in preparations for a second hearing of the joint parliamentary inquiry into the scandal, and KPMG International executives are visiting.
Pipeline of work hit by crisis
While existing work remains largely intact, the firm’s pipeline has been badly hit. KPMG is banned from bidding for public sector work at the federal level and in NSW and Victoria until at least late September, while private sector bookings have shrunk.
Major audit clients are reviewing contracts. Lendlease is ending its 68-year relationship with the firm over the scandal, while Macquarie is also reviewing the process by which KPMG won its $75 million-a-year audit contract last year.
Partners were told earlier this month that their pay for last financial year would likely be cut by 20 per cent, which would amount to average losses of $144,000 based on average annual partner distributions of $717,000 for 2024-25. It has also forecast double-digit partner income cuts for 2026-2027.
The exact number of partner exits remains uncertain because many intend to leave only after receiving a scheduled payment this month.
A KPMG spokesman said it was still reviewing its “operating model, cost base and workforce needs” for 2026-27 and no decisions had been made regarding specific cuts. They would be communicated to staff once they were and the firm was “determined to make responsible decisions that position the firm for a sustainable future”, he noted.
Labor senator Deborah O’Neill, who made the whistleblower’s allegations public in a speech in March, said KPMG staff “were being hurt by the governance failures of their senior leaders”.
“The impact of such job losses is another reason these firms need to reform,” she said.
“KPMG requires wholesale structural and cultural change to establish and entrench at its core, the ethics and professionalism that every Australian with superannuation deserves, and that our economy needs in order to function properly.”
Global swoops in
The KPMG International executives helping local leaders handle the scandal are mostly now operating out of a conference room in the firm’s Melbourne office that has been likened internally to a war room.
KPMG International chose to support local leadership rather than install foreign administration, as occurred during PwC Australia’s tax leaks scandal. However, the global body retains veto power over leadership appointments and brand use.
Other global executives who have been working locally, include John Bennett, the global head of risk management and monitoring, Andrew Cranston, the global head of business resilience and crisis management, global general counsel Anne Collin, global head of corporate affairs Jane Lawrie and Damian Templeton, the chief operating officer of KPMG Asia Pacific. Retired partner Ian Hancock is also assisting with crisis management and global advisory strategy.
The meetings held by Thomas and Wingrove have been likened to an exercise in soft power and have been well received by many partners.
Wingrove has done the tough talking, while Thomas has been more conciliatory. It was Wingrove, a hard-nosed former deals partner, who issued the warning to get in line or leave during a private meeting with a select group of unhappy partners, mainly from Melbourne, and again during the Sydney roadshow.
Almost an hour of the Sydney meeting was taken up with questions about the firm’s earlier botched efforts to investigate the allegations.
Greens senator Barb Pocock, who is on the parliamentary committee looking into the scandal, expressed doubt that the global partners’ involvement would result in meaningful change at KPMG given they had already “failed in their own responsibility to deal with whistleblowers in good faith”.
“KPMG International will say there’s ‘nothing to see here’, rotate the deck chairs and hope the caravan of public and parliamentary attention moves on. It will not. It is time for structural reform,” she said.
“The big question now is for Labor: do they have the guts to learn the lessons of the PwC and KPMG disasters and finally act?”
[Australian Financial Reivew]
