Some 36,000 children are enrolled in G8 Education's 395 childcare and early learning centres across Australia under well-known brand names such as Headstart, Jellybeans, Kool Kids and Kindy Patch Kids.
The stock exchange-listed operator made the shock announcement to close 40 centres on Wednesday ahead of its annual general meeting of shareholders in Brisbane.
The decision means parents using the "underperforming" centres will need to move their children to another nearby facility as staff are also redeployed "where possible".
G8, which has 8,800 workers, has been rocked by allegations of historical onsite child abuse by a former staff member at some of its centres in Victoria.
In 2025, Joshua Dale Brown was charged with more than 70 sex offences against eight children aged under two.
The alleged abuse happened at five G8 centres, and three other centres not owned by G8, between April 2022 and January 2023.
Chief executive Pejman Okhovat told shareholders that 2025 was a challenging year for the group and the entire early childhood education and care sector, given other allegations of on-site abuse affecting other operators.
"These incidents impacted family confidence and trust across Australia," he said.
"While our focus remains on supporting families and team members during this incredibly difficult time, we continue to do everything we can to give authorities the best chance of achieving justice for the families involved."
In July, G8 rolled out CCTV across its facilities and it continues to work with the federal government to ensure safeguards are in place to preserve child safety, dignity, privacy, and data collection.
"By the end of 2025, 95 per cent of our network was meeting or exceeding the national quality standards or NQS overall, four per cent above sector average," Mr Okhovat said.
G8's shares have trended down over the past year from around $1.28 as the scandal linked to its centres broke.
The stock was about 24 per cent lower to 18.2 cents on Wednesday morning.
However, Mr Okhovat also said the childcare sector overall was experiencing unprecedented uncertainty and lower usage rates driven by socio-economic factors.
These factors include higher inflation, interest rates and cost-of-living pressures, falling birth rates, as well as heightened regulatory scrutiny and changes, which can differ in each state and territory.
Mr Okhovat said G8's focus remains on safety and high-quality care, while noting its occupancy rates are down.
As of April 25, G8 said the spot occupancy rate across its centres was 56.4 per cent, down seven per cent on the same period last year.
"While the operating environment means G8 Education does not expect a material recovery in occupancy relative to (the previous corresponding period) this year, we will continue to review and adjust the operating model and cost base," Mr Okhovat said.
Mr Okhovat has repeatedly apologised since the allegations came to light, telling a Senate inquiry in February that he was horrified.
G8 has described the closure of the centres as a "suspension", adding that it will consider options including lease surrender, divestment or other alternatives.
G8 made a net loss of $303.3 million in 2025, after booking a large goodwill impairment expense, versus a profit of $67.7 million in the prior year.
