Photograph: Wolfgang Ratte/ReutersThank you for reading this post, don't forget to subscribe!
Consultancy giant PwC will cut more than 330 jobs in Australia as the company deals with the fallout from a scandal involving the misuse of confidential Treasury information.
The partnership will close its “skilled services centre” in South Australia, which has supported its government and private sector clients, from 2021, with 141 staff, including some auditors, being made redundant. About 200 Adelaide employees will be transferred to the firm’s national workforce.
Another 197 PwC Australia employees will be made redundant in the national workforce, which the firm attributed to “the downsizing of the business, the firm’s changing portfolio and strategic areas of focus, and economic headwinds”.
RELATED: PwC tax scandal: Senate committee finds company engaged in ‘calculated’ breach of trust
Earlier this year, PwC Australia sold its government consulting division to private equity firm Allegro Funds for just $1 after several departments refused to give it new work. That division generated about 20% of the firm’s revenue. A new spin-off firm, Skin Advisory, was created to save jobs.
PwC Australia announced on Wednesday that 75 staff who were due to transfer to Schein Advisory will also be made redundant after being furloughed last week. Employees were 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 Burrows, outlined the job cuts for staff and partners on Wednesday morning.
“These are extremely difficult decisions and my thoughts are with all those affected and their families by the changes we have been forced to make,” Burrows said in a statement.
“While we are optimistic about the future, PwC must take practical action to manage these challenges and make difficult decisions to meet the needs of our clients and ensure the long-term success of the firm.
“Across South Australia and the rest of the country, we will continue to serve our customers with the highest quality and professionalism – and we are grateful to our people for the resilience and dedication they have shown to our customers.”
The company will offer graduates starting their own consulting business next year the opportunity to voluntarily defer their position for six to 12 months.
The other four big consulting firms, including Deloitte and KPMG, have cut staff this year. Federal and state governments are reviewing their reliance on consultants and trying to do more of the work in-house.
On Wednesday, Westpac announced 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, about 2.4% of its approximately 25,000 employees. The cuts mostly impact employees in its advisory business, but will also affect employees in its tax department.
The news comes just months after PwC revealed that each of its more than 1,000 UK partners would be paid £906,000, a slight drop from record payouts a year earlier, when their £920,000 basic A bonus of £100,000 was added to the salary.
PwC’s UK chairman, Kevin Ellis, defended the firm’s decision to cut jobs rather than reduce partner profits. “When you’re running a business you have to be competitive at all grades, including partner grade,” he told the Financial Times.
In Australia, PwC partners are expected to take pay cuts of up to 30% this financial year, with executives saying this is to protect the pay of more junior staff. The average partner salary has declined by 12% in the last financial year.