PwC UK partners face salary cut of £44,000

PwC has cut the salaries of hundreds of partners in the UK by £44,000 as the accounting giant struggles with rising costs and a decline in deal winnings.

Average partner compensation fell 4.9 percent to £862,000 from £906,000 in the period to June, while overall profit fell 14 percent to £1.14 billion, the company said on Wednesday.

The pay cut came after PwC warned workers in July that they could expect lower pay increases and bonuses due to “difficult market conditions.”

PwC’s payouts to UK partners have fallen since hitting a record £1 million in 2022 as the post-pandemic deal boom boosted profits.

The “big four” – which include PwC, KPMG, Deloitte and EY – have spent the past year cutting costs and reversing the post-pandemic hiring boom by cutting hundreds of jobs following a drop in client demand.

Marco Amitrano, senior partner at PwC UK, said: “Even in a subdued market, we have continued to invest while managing our costs and adapting the way we work to respond to new opportunities. Our continued growth and stability puts us in a strong position for the future.”

The company has invested more than £100 million in technology, including its deal with ChatGPT maker OpenAI to develop its own chatbot for employees.

PwC increased revenue at its offices in the UK, Middle East and Channel Islands by 9 percent to £6.3 billion in the period to June, slower than the 16 percent growth rate a year earlier.

This was due to strong demand in the Middle East, where revenues increased by 26 percent as clients engaged PwC to advise on the growing number of infrastructure projects in the region.

This overshadows the performance of PwC’s UK office, where revenues rose by just three percent despite “particularly robust” demand for tax and audit services in a more difficult consulting market.

The consulting division was PwC’s best-performing division overall, with revenues rising 18 percent to £2 billion. PwC’s deal business grew revenues by 5 percent, despite the global deal market being “broadly flat.” The firm’s risk revenues fell 1 percent.

Mr Amitrano, who was elected earlier this year, added that both the government and businesses were seeking a “new era of change” to create new investment and expansion opportunities.

He said: “While the UK’s economic trajectory will not change overnight, there is more optimism among the businesses we speak to than there has been for some time.”

Mr. Amitrano, who replaced former PwC chief and telecommuting critic Kevin Ellis in July, also said increasing opportunities for in-person work will help the company grow.

PwC had previously informed its 26,000 British employees that they would have to spend at least three days a week in the office or with clients from January 2025.

The company will enforce the new policy by tracking employee locations in the same way it tracks employees to calculate billable hours.