PwC Reduces Hiring Target by 100,000 and Cuts 5,600 Jobs Amid AI Transition and Slow Growth

PwC reduces its global workforce by 5,600 and renounces its five-year hiring goal of 100,000 as revenue growth slows and AI transforms consulting.

According to the Financial Times, PwC reduced its global workforce in the last year and gave up on a five-year hiring goal as it struggled with slower revenue growth, internal scandals, and the emergence of artificial intelligence.

Mohamed Kande, the global leader of the Big Four accountancy and consulting firm, reportedly discreetly renounced the 2021 commitment made by his predecessor that PwC would increase its global workforce by 100,000 by the middle of the following year.

Instead, according to its annual report released on Tuesday, PwC reduced its workforce by 5,600 for the 12 months ending June 30. This resulted in a headcount below 365,000. To reach the goal, which was not specified in the report, the company would have to add over 30,000 workers in the current fiscal year.

“We are still hiring and meeting our investment goals,” Kande told the Financial Times. “We have implemented AI tools and trained over 315,000 people in AI, which is increasing our people’s productivity,” he continued.

PwC’s global revenue increased 2.7% to $57.0 billion, according to the company’s annual report, which was slower than the year before and lagged behind Big Four competitors Deloitte and EY, according to FT. After taking currency movements into account, they have recorded growth rates of 4.8% and 4%, respectively.

After accounting for a reorganization that shifted several service lines between divisions, PwC’s assurance business expanded by 0.9% internationally, while its tax business saw a 2.8% increase in revenue.

Both numbers fell short of competitors. Following a robust first half of the fiscal year, which was followed by decreased demand due to trade wars and geopolitical concerns, its consulting business saw a 4.4% increase in sales.

In contrast to prior yearly reports, PwC did not disclose any information regarding its net income for the fiscal year, which is a gauge of profitability. Each of the preceding three years has seen a slowdown in net income growth.

PwC reduced its employment this year for the first time since 2010, following the financial crisis. The goal of 100,000 net new employment was set before the introduction of generative AI and at a period of high demand for consulting services as businesses upgraded their IT due to the COVID-19 epidemic.

At the same time, Bob Moritz, Kande’s predecessor, set a $12 billion five-year investment goal that included staff training, acquisitions, and technology investments. PwC has already surpassed this goal by one year.

All four of the Big Four companies have had slower growth since the post-pandemic boom, and they have laid off employees in several rounds to protect partner profits. For instance, PwC laid off 1,500 employees in the US and 1,500 in the Middle East in recent months. Last month, Marco Amitrano, the UK head of PwC, announced that the company has reduced its hiring of recent graduates this year due to slower economic development.

PwC revenue growth in the year ending June decreased for the second year in a row in Asia, slowed to 3.7% in Europe, the Middle East, and Africa, and surged to 5.1% in the Americas. Global executives imposed more stringent regulations on companies operating in China and Australia as a result of previous crises.

The Big Four’s influence in the Australian economy and public sector was thoroughly examined after a partner in Australia revealed private material from his employment as a government consultant. The highly indebted real estate developer Evergrande in China was audited by PwC, who discovered that its revenues were inflated.

Despite impressive results in Japan and India, the challenging conditions in both nations led to a 4.1% drop in Asia-Pacific revenues overall.

Following the incidents in China and Australia, Kande has urged PwC local leaders worldwide to steer clear of high-risk customers. It withdrew from 13 countries throughout the year, primarily in Africa, and its overall clientele dropped from 180,000 to 175,000.

“Quality and having the right client portfolio are our top priorities,” Kande stated. He went on to say, “The company’s quality is just as important as its size.”