By Emmanuel Nduka
Australia’s consultancy giant – PwC, will cut more than 330 jobs, as the firm deals with the fallout of a scandal involving the misuse of confidential Treasury information.
According to Guardian UK, the partnership will close its “skilled service hub” in South Australia, which has supported its government and private-sector clients since 2021, with 141 staff to be made redundant, including some auditors. About 200 Adelaide staff will be transferred to the firm’s national workforce.
In the process, another set of 197 PwC Australia staff will be made redundant across the national workforce. This, the firm has attributed to “the reduction in the size of the business, the firm’s changing portfolio and strategic areas of focus, and economic headwinds”.
Heritage Times HT recalls that earlier this year, PwC Australia sold its government consulting division for just $1 to private equity firm Allegro Funds after many departments refused to give it new work. That division generated about 20% of firm’s revenue. A new spin-off firm, Scyne Advisory, was created to save jobs.
The firm announced on Wednesday that 75 staff that were due to be transferred to Scyne Advisory will also be made redundant, after being put on leave last week. The staff had been encouraged to find other work within PwC Australia but the firm said this was “not always possible or desired by the individual”.
The partnership’s chief executive, Kevin Burrowes, outlined the job cuts to staff and partners on Wednesday morning.
“These are extremely difficult decisions and my thoughts are with all of those people and their families impacted by the changes we have been forced to make,” Burrowes said in a statement.
“While we are optimistic about the future, PwC must take pragmatic action to manage these challenges and make difficult decisions to meet the needs of its clients and to ensure the long-term success of the firm.
“In South Australia and across the rest of the country, we will continue to serve our clients with the highest degree of quality and professionalism – and we are grateful to our people for the resilience and dedication they have shown their clients.”
The firm will offer graduates due to start in its consulting business next year the opportunity to voluntarily defer their positions for six to 12 months.
Other big four consultancy firms, including Deloitte and KPMG, have cut staff this year. Federal and state governments have been reviewing their reliance on consultants and seeking to do more work in house.
On Wednesday, Westpac announced that it would not renew PwC Australia’s audit contract, ending a 55-year association with the firm and partners. In a statement to the ASX, Westpac said the decision reflected “best practice for audit firm rotation”.
PwC UK has also announced 600 job cuts, which is about 2.4% of its approximately 25,000 employees. The cuts mostly impact staff in its advisory business but will also impact those in its tax department.
The news comes just months after PwC revealed more than 1,000 of its UK partners would be paid £906,000 (A$1,730,000) each, marking a slight fall from record payouts a year earlier, when their £920,000 basic pay was topped up by a £100,000 bonus.
PwC’s UK chair, Kevin Ellis, defended the firm’s decision to cut jobs rather than trim partner profits. “When you are running a business you have got to be competitive at all grades, including the partner grade,” he told the Financial Times.
In Australia, PwC partners are expected to receive a pay cut of up to 30 percent this financial year, which executives said was to protect the wages of more junior staff. Average partner pay last financial year dropped by 12 percent.
