PwC has slashed the pay packets of hundreds of UK partners by £44,000 as the accounting giant battles rising costs and a slowdown in deal-making.
Average partner pay sank by 4.9pc from £906,000 to £862,000 in the year to June, as total profits fell 14pc to £1.14bn, the firm announced on Wednesday.
The reduced payday comes after PwC warned employees in July to expect lower pay rises and bonuses because of “challenging market conditions”.
PwC’s payouts for UK partners have shrunk since hitting a record £1m in 2022 as the post-pandemic deal-making boom pushed up profits.
The “big four” – which includes PwC, KPMG, Deloitte and EY – have spent the past year cutting costs and reversing the post-pandemic hiring spree by axing hundreds of jobs after a slowdown in client demand.
Marco Amitrano, senior partner of PwC UK, said: “Even in a subdued market, we’ve continued to invest while managing our costs and adapting the way we work to respond to new opportunities. Our continued growth and stability places us in a strong position for the future.”
The firm has invested more than £100m in technology, including its deal with ChatGPT maker OpenAI to build its own chatbot for employees.
PwC grew revenues across its UK, Middle East and Channel Island operations by 9pc to £6.3bn in the year to June, slower than the 16pc growth rate recorded in the previous year.
This was driven by strong demand in the Middle East, where sales grew by 26pc as clients hired PwC to advise on the region’s growing number of infrastructure projects.
This dwarfed the performance of PwC’s UK operation, in which sales grew by only 3pc after facing a tougher consulting market despite demand for tax and audit services proving “particularly resilient”.
Consulting was PwC’s best-performing division overall after revenues jumped 18pc to £2bn. PwC’s deals business increased revenue 5pc despite the global deals market “remaining largely flat”. The firm’s risk revenues dipped by 1pc.
Mr Amitrano, who was elected earlier this year, added that the Government and businesses are all looking for a “new era of change” to drive fresh opportunities for investment and expansion.
He said: “While the UK’s economic trajectory won’t change overnight, there’s more optimism among the businesses we speak to than we’ve seen for some time.”
Mr Amitrano, who replaced former PwC head and remote-working critic Kevin Ellis in July, also said that increasing opportunities to work in-person will help grow the business.
It comes after PwC told its 26,000 UK employees that they must spend at least three days a week in the office or with clients from January 2025.
The firm will enforce the new policy by tracking employees’ locations in the same way it tracks staff to calculate chargeable hours.