Updated ,first published
KPMG chief executive John Sams has confirmed the embattled firm has begun talks with senior partners who will be cut as part of a staff cull next week due to the whistleblower scandal, but he declined to respond to reports that as many as 500 employees would be targeted.
“I have been clear in recent communications with partners and our people that we are undertaking a process to review our cost base and workforce to ensure the firm is sustainable and well positioned for the future,” he told partners in an email on Wednesday evening.
“Conversations have commenced this week with impacted partners. No decisions have been made about staff roles at this point but, as I have said in previous communications, we expect to make those decisions soon.”
According to reports on Thursday, as many as 500 employees and dozens of partners will be forced out.
The Australian Financial Review said KPMG’s Project Vector – which is being worked on by executives from its Australian and global offices – would initially target about two dozen local partners and 450 employees.
The Australian said the job cuts at KPMG could be as high as 500.
Sams said he expected to provide a further update next week.
The firm was expected to announce as many as 1000 staff would be cut in response to the massive change of fortunes since KPMG confirmed whistleblower allegations that confidential customer information was used to try to win new audit business.
Lendlease has confirmed it will dump KPMG as its auditor and Macquarie Group is also reviewing how KPMG won its lucrative audit contract worth $70 million last year.
“I am frustrated and sorry that we are all dealing with this speculation. I know it is unsettling for all of us, and our teams,” Sams said.
“I can’t comment any further until decisions are made, but I expect to provide a further update next week.”
The planned job cuts come just one week after current and former KPMG executives were forced to front another public hearing into the scandal and the actions which kept the explosive allegations suppressed for two years.
Sacked KPMG executive Eileen Hoggett was confronted with evidence showing she had emailed a colleague about confidential documents stored in her locker, confirming one of the most damning whistleblower allegations.
Hoggett told the hearing she was still trying to ascertain the reason for her unprecedented sacking, and attested to the financial cost.
“I don’t get my accrued annual leave. I don’t get the retirement payment, which I contributed to as a partner for 21 years, and I did not get paid for the last month up until to the date of my expulsion. So (it’s a) significant financial penalty,” she said.
This week, the Australian Securities and Investments Commission revealed its probe into the whistleblower scandal at KPMG now included companies controlled by the accounting and consulting giant, and potentially these companies’ directors.
The directors, who were on the boards of KPMG’s corporate entities since the initial complaint was made in 2024, include former NSW premier Mike Baird and senior KPMG executives.
This includes former CEO Andrew Yates and Martin Sheppard who resigned over the growing scandal with full retirement benefits despite questions over their roles in not discovering the scandal for almost two years.
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Colin Kruger is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email.