PwC, one of the "Big Four" accounting firms, has announced plans to cut up to 600 jobs in the United Kingdom as it grapples with slower growth and a decline in employees voluntarily leaving the company.
The decision has raised eyebrows, as PwC's leadership has defended maintaining competitive pay packages for its senior staff, including its partners.
The accounting and consultancy giant revealed that it is taking steps to "right-size" the business following a period of weaker growth, rising operational costs, and a reduction in the number of employees leaving the firm through natural attrition.
PwC's own attrition rate has notably dropped from 15% to ten per cent in recent months, at a time when job vacancies in rival firms and start-ups are also on the decline.
These job cuts, affecting approximately 2.4% of PwC's UK workforce of around 25,000 employees, will primarily impact the advisory business, with some staff in the tax department also feeling the impact.
The cuts are expected to affect employees at various levels of seniority, though the most senior partners and those in their first year of employment are likely to be shielded from the downsizing.
PwC's decision to prioritise maintaining competitive pay for its top executives has come under scrutiny.
Just months ago, the company disclosed that over 1,000 of its UK partners would be paid £906,000 each, representing a slight decrease from the previous year's payouts, when their basic pay of £920,000 was supplemented by a £100,000 bonus.
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Kevin Ellis, the UK Chair of PwC, defended the firm's choice to cut jobs rather than reduce partner profits.
He emphasised the importance of remaining “competitive at all levels”, including among the partner ranks, stating, "When you are running a business, you have got to be competitive at all grades, including the partner grade."
PwC had previously announced that its UK profits fell from £1.5billion to £1.3billion in 2022, although the prior year's figure had been boosted by a £139million gain from the sale of its global mobility business.
The company also reported an increase in staff numbers from 24,500 to 26,000 in 2022.
In response to the job cuts, PwC is expected to initiate compulsory redundancies if employees do not voluntarily leave the company, alongside offering more generous leaving packages.
The company stated, "In light of lower-than-normal attrition rates and subdued growth in parts of the business, we are making targeted voluntary severance offers to some of our people. Decisions about jobs are never taken lightly – this is about flexing our business to demand. There are still areas of good growth and recruitment."