KPMG chief executive John Sams confirmed that the embattled firm has begun talks with senior partners who will be cut as part of a massive staff purge expected next week due to the whistleblower scandal engulfing the firm.

“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.”

Sams said he expects to provide a further update next week.

Internal sources have said this is when the firm is expected to announce as many as 1000 staff will be cut in response to the massive change of fortunes since KPMG confirmed whistleblower allegations that confidential customer information was used to try and win new audit business.

The Australian reported 500 staff will be cut, which is at the lower end of estimates in recent weeks.

“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.”

More to come

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.