KPMG Australia has begun cutting jobs across its partnership and staff ranks as the accounting firm confronts the escalating fallout from a whistleblower scandal involving the misuse of confidential client information to win audit business.
Conversations with nearly 50 partners are scheduled to conclude on August 21, according to a report in The Australian. The following week, cuts will extend to client-facing employees, with approximately 450 positions expected to be eliminated, bringing the total potential reduction to roughly 500 roles.
The restructuring, internally known as Project Vector, was confirmed in an email to partners from KPMG Australia CEO John Sams on Wednesday. Sams said discussions with affected partners had commenced, while decisions on staff roles were expected imminently. He indicated that the firm was reviewing its cost base and workforce to ensure it remained sustainable and well positioned for the future, promising a further update the following week.
The Australian arm has reportedly sought financial support from KPMG International to remain solvent, as anticipated revenue losses compound what are described as substantial personal borrowing levels among partners.
The scandal has already triggered an exodus of senior leadership. Former CEO Andrew Yates, chairman Martin Sheppard, and chief operating officer Eileen Hoggett — all trained as auditors — have departed, along with former head of audit Julian McPherson and audit partners Paul Rogers and Kim Lawry.
Client relationships have suffered significant damage. Lendlease has confirmed it will replace KPMG as its auditor, while Macquarie Group is reviewing how the firm secured a $70 million audit contract last year. The controversy first surfaced when Senator Deborah O’Neill used parliamentary privilege to reveal whistleblower claims alleging that senior audit partners had improperly obtained documents belonging to Lendlease in 2024. KPMG’s leadership initially dismissed the whistleblower as a disgruntled former employee and terminated his employment, but subsequent investigations substantiated the majority of the claims.
Regulatory scrutiny has widened in parallel. The Australian Securities and Investments Commission has expanded its investigation to include companies controlled by KPMG and potentially their directors. Individuals who served on the boards of KPMG’s corporate entities after the initial complaint in 2024 include former NSW premier Mike Baird, Yates, and Sheppard.
Notably, the current round of job losses will not extend to the audit division itself, as these staff are considered essential to retaining existing clients. The tax team has similarly been excluded from redundancies.
The broader professional services sector has been under pressure since an earlier controversy involving PricewaterhouseCoopers’ tax division, which triggered a marked decline in government consulting contracts across all four major accounting firms. KPMG had previously been expected to consider cutting as many as 1,000 positions as the scandal affected its business, though the firm has not confirmed the final number of roles that will be affected.
A public hearing into the scandal took place a week before the job cuts were reported, during which current and former KPMG executives appeared before lawmakers. Former executive Eileen Hoggett was questioned over evidence concerning confidential documents kept in her locker.
Sams acknowledged that the uncertainty was unsettling for employees and reiterated that a further update would be provided in the coming week.