PwC Slashes 1,800 Jobs in First Mass Cuts Since 2009

Another Big Four auditor is getting smaller: PricewaterhouseCoopers said Wednesday it will lay off 1,800 staff members at its US unit next month.

The move, first reported by The Wall Street Journal, will impact 2.5% of US employees; it also means PwC will join chief rivals EY, KPMG, and Deloitte, which have already laid off thousands of staff in the last two years as the industry tried to rightsize staffing levels amid an economic seesaw.

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The Big Four hired up when demand from corporate clients spiked during the pandemic and kept up as the market boomed — PwC reported a record $53 billion in revenue in fiscal 2023, up 5.6%. But high interest rates and a weakening economy have pushed down demand, as third-party services are among the first things companies will look to when trimming expenses.

At the same time, there’s been less turnover in the industry than expected following an especially volatile period from 2019 to 2021, when 300,000 US auditors and accountants quit, according to Bureau of Labor Statistics data. KPMG and EY had layoff rounds that impacted roughly 5% of staff last year, while Deloitte cut 1.5%. PwC, unlike its peers, had resisted making major cuts to correct the imbalance. Until Wednesday, that is, when it said its first major round of layoffs since 2009 would play into an already-planned restructuring:

• In July, PwC’s US unit returned to three business lines from two, three years after it combined its tax reporting and accounting businesses. The two now operate separately again, while the unit’s consulting business remains separate. The company is also restructuring products and technology teams to embed them more closely into individual business lines.
• Additionally, PwC is slashing the number of new partners it brings in. The WSJ reported in July that the new class of partners this year was likely to be 85, down from 174 in 2023. McKinsey, EY, and KPMG have also unveiled shrinking new partner classes.

Jump or Push: Accounting news site Going Concern reported last year that PwC and EY were planning tough performance reviews and a stricter return-to-office policy, possibly designed to encourage staff to leave without having to resort to formal layoffs.