KPMG Australia to Cut Nearly 400 Jobs as Consulting Demand Weakens

KPMG Australia has announced plans to cut nearly 400 jobs as the professional services firm faces weaker consulting demand, the fallout from a confidential-information scandal and a challenging economic outlook. The restructuring will affect about 27 partners and 360 employees, representing roughly 5 per cent of the firm's workforce. Most of the reductions will come from its consulting and business services divisions.

The announcement comes as KPMG Australia reported a difficult financial year. Its total revenue for the year ended June 2026 fell about 1 per cent to A$2.257 billion. The decline was largely driven by weaker consulting performance, with consulting revenue falling by about 17 per cent. The firm has also faced the loss of government contracts following allegations that confidential client information was misused.

KPMG Australia's new chief executive, John Sams, said the firm was responding to both immediate business pressures and broader changes across the professional services sector. He warned that economic growth could remain subdued until at least 2028, potentially affecting corporate investment decisions and extending the time companies take to approve major projects and consulting engagements.

The restructuring also reflects changes in how clients are purchasing professional services. Governments in particular have reduced their reliance on external consultants, while companies are increasingly looking for technology-driven solutions and greater value from advisory engagements. Artificial intelligence is also changing the way consulting work is delivered, creating pressure on traditional business models and workforce structures.

KPMG said it would reorganise several parts of its advisory business. Its mid-market and private-deals teams will be brought together with deal advisory and infrastructure, while its advisory team will join the consulting business. The objective is to create a more integrated structure and align operations more closely with changing client requirements.

The job cuts follow a major governance and reputational crisis at KPMG Australia. Allegations concerning the misuse of confidential client information emerged earlier this year and triggered investigations, leadership changes and increased scrutiny of the Big Four professional services industry. The controversy has also contributed to the firm's loss of government work and increased pressure to strengthen governance, ethics and internal controls.

Despite the challenges facing consulting, KPMG's other business areas have performed comparatively better. Its audit and assurance revenue increased by about 11 per cent, while tax and legal revenue also recorded strong growth. The contrast highlights how demand is shifting within professional services, with clients continuing to require compliance, tax, assurance and technology expertise even as discretionary consulting spending comes under pressure.

The KPMG restructuring is therefore more than a company-specific cost-cutting exercise. It reflects a wider transformation underway across the global consulting industry. Firms are being pushed to demonstrate measurable business outcomes, adopt AI more rapidly, control costs and adapt their workforce to changing client expectations. At the same time, government scrutiny of consulting spending and professional-services ethics is increasing.

For the consulting industry, KPMG Australia's latest move signals that the traditional model of large consulting teams and prolonged advisory engagements may face continued pressure. Firms that can combine specialised expertise with technology, AI capabilities, stronger governance and clear commercial outcomes are likely to be better positioned as clients become more selective about consulting expenditure.

KPMG's immediate priority will be to stabilise its Australian operations, rebuild trust and create a more sustainable cost structure. However, with the firm itself warning that difficult market conditions could persist beyond the current financial year, the restructuring could also serve as an indication of the challenges other professional services and consulting companies may face in the period ahead.