PwC to cut up to 600 UK jobs as attrition rate plunges

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PwC plans to cut up to 600 jobs in the UK as a plummeting number of resignations at the firm pushes it to make staff redundant instead.

The firm will launch a voluntary redundancy programme for 500-600 people but will cut jobs on a compulsory basis if not enough people opt to leave, people familiar with the matter told the Financial Times.

PwC was the last holdout against significant UK redundancies among the Big Four accounting firms but bosses acted after a fall in the number of people resigning in recent months.

Consultancies were hit by a “great resignation” in 2021 and 2022 just as demand for their services soared but more recently have been challenged by rising costs, falling demand for some of their services and a glut of employees opting to remain in post as vacancies at start-ups and technology firms dwindle.

PwC’s attrition rate — the percentage of staff leaving each year — has fallen 5 percentage points in recent months and is now hovering at about 10 per cent, according to the people. The planned redundancy round would still result in fewer people leaving than if attrition were at normal levels, they added.

The redundancies, affecting up to 2.4 per cent of the UK firm’s 25,000 employees, will be directed mainly at PwC’s advisory business with a small number of jobs in the tax department also set to be affected, according to the people, who added that the audit division would not be affected.

Staff at all levels from director — the most senior echelon below partner — to those in junior positions would be affected, the people said, with a greater number of junior and mid-level roles to be cut, reflecting the firm’s bottom-heavy structure.

PwC UK chair Kevin Ellis told the Financial Times the firm had decided to launch the redundancy round rather than delaying or cancelling job offers to hundreds of graduates and school-leavers.

This was partly a matter of “fairness” in not cutting off opportunities for people starting their careers and who have not yet been trained, said Ellis. Slowing down hiring would also have a negative impact on the firm’s diversity and social mobility efforts as new hires are generally more diverse than the organisation as a whole, he added.

Retaining staff in their current roles rather than continuing to hire into teams that were growing “would make our business lopsided”, Ellis said.

Staff in their first year at PwC will not be included in the redundancy programme, while people accepting voluntary severance will receive a more generous package than in a compulsory redundancy, according to people at the firm.

PwC’s partners were paid an average £906,000 in the firm’s most recent financial year as profits stagnated.

Asked whether it was right to make redundancies rather than taking a hit to partner profits, Ellis said: “When you are running a business you have got to be competitive at all grades, including the partner grade.”

“You need to be a profitable business to play your part in society, whether funding apprenticeships or programmes in schools,” he added.

Deloitte is cutting about 800 jobs in the UK while EY and KPMG have both launched redundancy programmes, each affecting hundreds of staff.