KPMG Australia announced that it will lay off almost 400 employees. They are estimated to be 360 staff and 27 partners in its consulting and business services who will be fired as the scandal-ridden accounting firm seeks to reduce costs after a decrease in demand for its consulting services.
The reduction, amounting to roughly 5% of its workforce, was disclosed in a statement issued Monday, Bloomberg reported.
KPMG Australia reported a 1% drop in revenue to A$2.26 billion for the year ended June. Consulting revenue fell 17% to A$632 million, while average equity partner pay declined 13%.
The firm said the decision followed a review of its costs and workforce needs amid weak economic conditions, tough market conditions and the impact of its conduct and whistleblower matters. It also plans to streamline parts of its business and bring teams closer to its global advisory operations.
New chief executive John Sams said he expected subdued economic growth to persist until at least 2028, pointing to the growing impact of artificial intelligence, reduced government spending on consultants, and the lingering effects of the firm's governance troubles.
"We also recognise the challenges created by our own failings, and the work we must continue to do to rebuild trust," he said as per the outlet, adding that ongoing internal and external reviews would shape the next phase of the firm's recovery plan.
The firm has been reeling from allegations that its partners misused confidential client information, including from property group Lendlease, to pursue business from rival companies, a controversy that has already cost it several senior leaders, including former chief executive Andrew Yates and former chairman Martin Sheppard.
The fallout has also triggered a parliamentary inquiry, prompted Lendlease to move to replace KPMG as its auditor, and led the Australian government to propose stricter oversight of the consulting sector, including new powers to penalise firms for misconduct.
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