PwC cuts 1,800 jobs due to falling demand for consulting

The auditing giant PricewaterhouseCoopers (PwC) is reportedly cutting around 1,800 jobs.

The layoffs, the first in 15 years, come amid a restructuring of PwC's technology group as demand for the firm's consulting services declines, the Wall Street Journal reported Wednesday (September 11), citing sources familiar with the matter.

According to these sources, PwC – one of the “Big Four” accounting firms – is cutting staff in the US and elsewhere, particularly in its US consulting, product and technology divisions. The cuts, about half of which will be made abroad, will affect both employees and executives. The corporate services, audit and tax divisions will also be affected, the sources said.

PwC plans to inform those affected, about 2.5 percent of the U.S. subsidiary's workforce, in October, the sources added. An employee memo obtained by the WSJ outlined the layoff and restructuring plans.

“There will be a resourcing action that will affect a relatively small portion of our people, which is never easy,” Paul Griggs, PwC's U.S. chief, said in the memo, adding that the company hopes to restructure its product and technology teams to embed them in individual business units and streamline processes in corporate services.

When asked by PYMNTS for comment, Tim Grady, chief operating officer of PwC US, said the move was necessary.

“To remain competitive and position our company for the future, we continue to transform areas of our business and align our workforce to better support our strategy. This includes attracting the right talent and skills and moving them to the areas where we need them most,” Grady said in an emailed statement. “For now, we are focused on running our business well and adapting to the needs of our customers and the rapidly changing market.”

The WSJ noted that PwC has positioned itself as an outlier among the Big Four by not cutting its U.S. workforce over the past two years. The other three firms – EY, KPMG and Deloitte – have laid off thousands of U.S. employees during that period.

The layoffs come as PwC faces other pressures as well. For example, the U.S. Public Company Accounting Oversight Board (PCAOB) issued new quality control standards for accounting firms earlier this week.

These standards were adopted by the U.S. Securities and Exchange Commission (SEC) in a 3-2 vote, despite objections from organizations such as the U.S. Chamber of Commerce and companies such as EY and PwC.

The standards require audit firms that audit more than 100 listed companies to establish an oversight board that includes at least one independent outsider to help monitor audit quality.

“An accounting firm is ultimately a professional services firm and must ensure the quality of the services it provides,” said SEC Chairman Gary Gensler. “I am pleased to approve this standard because it will improve auditors' quality control systems and thereby better protect investors.”