PwC Laying Off 1,800 Employees in First Formal Cuts Since 2009
Sept. 11, 2024
The cuts will affect 2.5% of the workforce at the Big Four accounting firm’s U.S. unit, people familiar with the matter said
PricewaterhouseCoopers’s U.S. unit is laying off about 1,800 workers, its first formal layoffs since 2009, and restructuring its technology group as the firm faces slowing demand for some of its advisory business.
The Big Four accounting firm is in the process of cutting employees in the U.S. and elsewhere, primarily in its U.S. advisory and products and technology operations, according to people familiar with the matter. The cuts, about half of which are offshore, span employees ranging from associates to managing directors and include business services, audit and tax, the people said.
PwC plans to notify those affected, roughly 2.5% of the workforce at the U.S. unit, in October, the people said.
PwC on Wednesday announced its plans for layoffs and the restructuring in a memo to U.S. staff obtained by The Wall Street Journal. “There will be an element of resource action that will impact a relatively small proportion of our people, something that is never easy,” Paul Griggs, PwC’s U.S. leader, said in the memo.
“Ultimately, we are positioning our firm for the future, creating capacity to invest, and anticipating and reacting to the market opportunities of today and tomorrow,” Griggs added. The executive said he would be remiss if he didn’t acknowledge the announcement was being made on Sept. 11, a day on which the firm lost five colleagues.
PwC said the last formal layoffs in its U.S. unit occurred in 2009. In 2017, the firm offered employees new roles as part of a restructuring and if employees declined, they left the firm.
The firm has said that it has been an outlier among the Big Four over the past two years by not laying off anyone in the U.S. and having no plans to do so. EY, KPMG and Deloitte collectively laid off thousands of U.S. workers in that period.
PwC plans to restructure its products and technology teams to further embed them in individual business lines and streamline processes in business services, Griggs said.
The moves come after Griggs began as U.S. leader in May. In succeeding Tim Ryan in the role, he launched a structural overhaul that took effect in July, shifting the roughly 75,000-person U.S. unit back to three business lines from two. Tax returned to being a separate U.S. business in July. The firm in 2021 combined its tax-reporting and accounting businesses into one unit called trust solutions, with remaining revenue stemming from consulting solutions, which included tax consulting.
“To remain competitive and position our business for the future, we are continuing to transform areas of our firm and are aligning our workforce to better support our strategy, including attracting and moving the right talent and skill sets to the areas where we need them most,” Tim Grady, PwC’s U.S. chief operating officer, said in a statement to The Wall Street Journal.
The firm’s chief products and technology officer, Joe Atkinson, in June became global chief AI officer after seven years in the role. Atkinson, on a 2021 podcast, said it is important to give employees the proper tools to carry out their responsibilities, not just update them on industry trends. That’s largely why PwC often opts to build its own products instead of purchasing them from third-party vendors, he said at the time.
PwC’s products and technologies are aimed at addressing a range of corporate challenges, including managing risks around supply chains, data privacy and regulations. One of PwC’s products, ProEdge, is a digital platform with more than 150 “immersive learning experiences” to help train employees on new skills.
PwC will continue to evaluate whether to stop building certain products, among other investment decisions, the people familiar with the matter said.
Many professional-services firms have experienced weaker demand in certain areas due to higher interest rates and weaker economic conditions. Several firms in the industry stepped up hiring to address pandemic-fueled changes in their corporate clients, but attrition over the last couple of years has been lower than they expected. The firms, some of which focus on individual performance as the basis for cuts, risk losing stature if they slash a sizable chunk of jobs at once.
[CFO Journal]
