Financial Times reported late yesterday that the King’s PwC will cut up to 600 jobs but first they’re going to try to get that many people to leave voluntarily. The historically low attrition rate over there has dropped even further to a mere ten percent. Given that a much higher amount of churn is baked into the business model, people gotta go. Whoever spoke to FT said that even after 600 people go it will still be fewer people than would make up expected attrition of 15-20 percent.
Said FT:
The firm will launch a voluntary redundancy programme for 500 to 600 people but will cut jobs on a compulsory basis if not enough staff 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.
When all’s said and done we’re talking at most 2.4 percent of PwC UK’s 25,000 people. As expected, most of the cuts are to come from advisory ranks though a few tax people are also on the chopping block. “The audit division would not be affected,” wrote FT of what they were told by their source.
The cuts will be at director and down “with a greater number of junior and mid-level roles to be cut, reflecting the firm’s bottom-heavy structure,” wrote FT.
PwC UK chair Kevin Ellis said they decided cutting people was better than delaying or canceling new hire offers:
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.
First years are not up for cutting, those staff who are and who leave on their own accord will receive a bigger severance package than anyone who may be forced out should not enough people leave in the voluntary resignation round. According to the person who blabbed to FT, that is.
We’ll let you know if we hear more.
PwC to cut up to 600 UK jobs as attrition rate plunges [Financial Times]