PwC Australia slashes jobs after tax leaks scandal

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PwC Australia is cutting 329 roles and 37 partners are leaving the firm as part of the latest overhaul of its operations in the wake of a damaging “tax leaks” scandal.

The Big Four firm, which employs about 7,000 people in the country, has been embroiled in scandal for more than a year over the sharing of confidential information about legislation designed to clamp down on tax avoidance. The firm used it to try to win new business, and the information was fed into PwC’s global network.

The scandal has prompted government inquiries into the country’s powerful consulting and auditing sector and drawn intense scrutiny of the relationship between the public sector and firms including PwC, EY and KPMG. 

PwC Australia was one of the largest in the firm’s international network, generating A$3bn (US$2bn) in revenue in the financial year prior to the tax leaks being made public. It has since hived off its lucrative government consulting business into an independent firm and lost some contracts, including with the bank Westpac, an audit client for two decades.

The latest round of job cuts — which comes on top of about 350 made last year — will hit its consulting operations, but PwC stressed that all lines of business including support functions would be affected. The 37 partners have agreed to accelerate their retirement as part of the latest overhaul. 

PwC’s staff were told of the cuts during a call on Wednesday morning.

It is the latest action since Kevin Burrowes, a veteran of PwC’s global network, was parachuted in as chief executive of PwC Australia last year to restore its reputation.

“This has been a very challenging and complex process, but an important one, as we realign our business structure with our new long-term strategy,” he said on Wednesday.

PwC Australia intends to kick off a series of roadshows to unveil its new strategy in the coming months and will make promotions and appoint new partners in July following the reset.

Its partners this month voted in favour of appointing an independent chair of its governance board as well as two independent board members, an unusual move for the normally insular consultancy firms.

A new remuneration system has also been proposed, in which a portion of the salary due to members of the leadership team will be held back and then not paid out if cases of misconduct arise.

PwC remains under political pressure to release a report about the use of the tax leaks data outside Australia and to name six overseas partners who used the information.