Another day, another big accounting firm slashing staff salaries during the COVID-19 pandemic. This time it’s PwC Australia. At least P. Dubs hasn’t laid anyone off (yet) like KPMG Australia did.
The Australian Financial Review reported today:
Big four consulting firm PwC will cut the hours and pay of under-utilised staff by up to 40 per cent to offset the COVID-19 induced loss of business.
The firm’s 700-odd partners have also been told to expect their annual income to be cut by between 30 per cent and 40 per cent. For a partner earning $700,000, this could mean a cut to income of up to $280,000.
The firm has also deferred pay rises and bonuses for all partners and staff, and will defer new partner admissions, normally scheduled for July 1, until January 1, 2021.
It seems like PwCs around the globe are doing everything but layoffs at this point. In the U.K., the Queen’s PwC put a halt to promotions, raises, and bonuses last week in an effort to protect employees’ jobs, according to City A.M. U.K. Chairman and Senior Partner Kevin Ellis told staff that partners would be hit the hardest in order to preserve jobs:
“I want to reassure you that we will use the power of our partnership to do all we can to to protect your jobs and salary security, which means asking the partners to accept the financial impact of this,” Ellis said in a voice note to staff, a transcript of which has been seen by City A.M.
Big 4 equity partners in the U.K. might not be getting their lucrative payouts this year in an effort by the firms to conserve cash and prevent layoffs, according to a Financial Times report last week. In the 2019 financial year, PwC equity partners got an average £765,000, a 7% pay increase from £712,000 the previous year.
They can kiss 2020’s payout goodbye.
In India, same: staff raises, bonuses, and promotions have been deferred, and PwC executive directors and partners are reportedly taking a 25% pay cut.
We haven’t heard (or been told) much about what’s going on at P. Dubs here in the good ol’ U.S. of A. Supposedly Tim Ryan gave the same “layoffs as a last resort” message to PwCers as KPMG CEO Lynne Doughtie gave to Klynveldians and that PwC would slash partner pay before any jobs are cut, but we haven’t heard it’s come to that … yet.
According to a document seen by AFR, PwC of the Australian variety will begin a “reduced working week program” on May 1, which will last until the end of June. Under the plan, the majority of staff will move to “80% of the [current full-time equivalent hours], and a corresponding reduction in remuneration,” AFR reported.
“For certain teams where utilisation is very low, the working week will be reduced by a further 20 per cent (e.g, working a three-day week for a full-time person) but we don’t intend to drop anyone below the 60 per cent threshold.”
A 40% pay cut for staff has to be an absolute punch to the gut. So will PwCers only give 60% effort now? If you work for PwC Australia, hit us up using the contact information below.
PwC to cut staff hours and pay by up to 40pc [Australian Financial Review]
PwC UK freezes pay as partners told they will shoulder financial burden of crisis [City A.M.]