•Quietly cuts 5,600 staff numbers in months

PwC shrank its global workforce in the past year and abandoned a five-year hiring target as it grappled with slower revenue growth, internal scandals and the rise of artificial intelligence, the Financial Times has reported.

The Big Four accounting and consulting firm’s global chair, Mohamed Kande, quietly scrapped the pledge made by his predecessor in 2021 that PwC would add 100,000 to its worldwide headcount by the middle of next year, it said.

Instead, PwC cut staff numbers by 5,600 in the 12 months to June 30, according to its annual report, published on Tuesday, pushing its headcount below 365,000. The firm would need to add more than 30,000 jobs in the current financial year to meet the target, which was not mentioned in the report.

“We continue to hit our investment targets, and we continue to hire,” Kande told the Financial Times. “We have rolled out AI tools and upskilled over 315,000 in AI which is boosting the productivity of our people,” he added.

According to FT, the annual report showed PwC’s global revenue rose 2.7 per cent to $57.0 billion, slower growth than in the previous year and lagging behind Big Four rivals Deloitte and EY. They have reported growth rates of 4.8 per cent and 4 per cent, respectively, after accounting for currency fluctuations.

PwC’s assurance business grew 0.9 per cent globally, after adjusting for a reorganisation that moved some service lines between divisions, and its tax business’s revenues were 2.8 per cent higher.

Both figures lagged behind rivals. Its advisory business increased revenue by 4.4 per cent after a strong first half of the fiscal year gave way to weaker demand in the wake of trade wars and geopolitical uncertainty.

Unlike in previous annual reports, PwC did not publish any details of its net income, a measure of profitability, for the financial year. Net income growth had slowed in each of the previous three years.

This year was the first since 2010, in the aftermath of the financial crisis, that PwC shrank its workforce. The 100,000 net new jobs target was set during a boom time for consulting work as the Covid-19 pandemic drove companies to upgrade their IT, and before the launch of generative AI.

Kande’s predecessor, Bob Moritz, at the same time set a five-year investment target of $12 billion — covering technology spending, acquisitions and training for staff — which PwC has met a year early.

The post-pandemic boom has given way to more sluggish growth for all of the Big Four firms and they have conducted multiple rounds of lay-offs to preserve partner profit. In recent months, PwC cut 1,500 staff in the US and 1,500 in the Middle East, for example. PwC’s UK boss, Marco Amitrano, last month said it had cut graduate recruitment there this year because of slower economic growth.

By region, PwC revenue growth in the year to June accelerated to 5.1 per cent in the Americas, but slowed to 3.7 per cent in Europe, the Middle East and Africa, and shrank for a second consecutive year in Asia. Earlier scandals in China and Australia prompted global bosses to impose stricter controls on the businesses there.

In Australia, a partner leaked confidential information from his work as an adviser to the government, prompting a wide-ranging review of the Big Four’s role in the public sector and in the Australian economy. In China, PwC was auditor of Evergrande, the heavily indebted property developer, which was found to have overstated revenues.

The difficult environment in both countries contributed to a 4.1 per cent decline in Asia-Pacific revenues overall, despite strong performances in Japan and India.

Kande has pushed PwC’s local leaders around the world to avoid risky clients after the Chinese and Australian scandals. During the year it pulled out of 13 countries, mostly in Africa, and its total number of clients fell to 175,000 from 180,000.

“We are relentlessly focused on quality and having the right client portfolio,” Kande said. “The quality of the business is just as important as the size of the business,” he added. (THIS DAY)

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