Insiders reveal morale hits rock bottom as staff leave consultancy firm in droves

KPMG is contemplating a second round of redundancies as multiple insiders have revealed that staff have left the embattled firm in droves.

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The potential cuts were attributed to the ban on new federal work imposed on KPMG in mid-June 2026 following revelations of executive misconduct.

Following the independent review, conducted by Dr Ian Watt and commissioned by the Finance department, the ban has been further extended by four months to the end of February 2027.

The firm has been banned from new federal work until end of February 2027. Picture by Shutterstock

Although the extended ban had stopped the firm from winning new contracts, it had not stopped federal agencies from amending and extending existing ones.

After the four-month extension of the procurement ban, KPMG is understood to be assessing its options. The firm has not set a redundancy target or made a decision on a second round.

Staff departures and usual turnover could affect future decisions, including the number of employees affected.

A former KPMG employee based in Canberra said staff there felt they had suffered the consequences of the controversy that was started in the Sydney office.

"We've done nothing wrong, yet we're being punished," the former employee said.

The former employee said morale in the office had suffered and departures from the firm had become difficult to keep track of, as they often saw colleagues announcing new roles on social media.

"It seems like every day on LinkedIn somebody's announcing they're leaving and going to another firm," the former employee said.

They said mid-tier and boutique firms had pounced on the opportunity to recruit KPMG staff, including those who had become disillusioned with life at the firm.

Another former employee said staff lower down the corporate ladder in particular were in high demand as rival consulting companies circled especially mid-tier and boutique firms.

HorizonOne Recruitment director Andy Batstone said a large number of KPMG staff had reached out to explore new opportunities.

Mr Batstone said his company had helped these former KPMG employees find work in government roles, private businesses and other consultancies.

These consultants could identify potential employers themselves as they already had insight into which firms were winning work and expanding their government contracts, Mr Batstone said.

CBR Recruitment managing director Adam Kowalski said more employees from KPMG and other consultancies than usual had been looking for work.

"There's probably a higher volume than normal that we'd see people coming from consulting firms like KPMG," Mr Kowalski said.

"The mid-tier firms are seeing opportunity to engage good people at the moment for sure."

Greens finance and public service spokeswoman Barbara Pocock said the firm's executives had to suffer the cost for its unethical conduct.

"They have let us all down, but none more than employees innocent of wrongdoing," Senator Pocock said.

"It is unfair that staff are made redundant and outgoing senior leaders receive huge bonuses, and wrongdoers pay trivial - or no - penalties.

"KPMG has lost its social licence, wrecked its reputation and now makes a precarious place to build a career. I am not surprised that workers are leaving and, where they have had no role in their leaders' failures, I have real sympathy for their circumstances."

Senator Pocock said a key issue with firms like KPMG was that they were not regulated like big corporations.

"It is time to implement the recommendations of earlier inquiries: subject these massive partnerships to the same rules as other large entities through corporations law, separate the functions of consultancy from audit and regulate them properly," she said.

"KPMG's scandal of sharing confidential information and mistreating whistleblowers has exposed a toxic work culture of profit above all else. This culture is driven from the top. It doesn't strike me as a healthy workplace and there are no quick fixes where trust has been so fundamentally breached."

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