PWC is now laying off a whopping 1,800 employees after announcing a major restructuring plan in the United States.
PricewaterhouseCoopers (PwC) has revealed a significant restructuring plan that will result in the layoffs of approximately 1,800 employees in the United States.
This marks the firm’s first major workforce reduction since 2009, affecting about 2.5% of its U.S. staff.
The layoffs impact a range of positions, from associates to managing directors across business services, audit, and tax, according to a report from the Wall Street Journal (WSJ).
The job cuts are largely concentrated in the advisory and technology sectors, with many of those affected being based offshore.
PwC’s U.S. leader, Paul Griggs, communicated these changes in a memo, stating, “We are positioning our firm for the future, creating capacity to invest, and anticipating and reacting to the market opportunities of today and tomorrow.”
In addition to the layoffs, PwC plans to integrate its products and technology teams into various business lines.
These adjustments are part of a broader restructuring effort initiated by Griggs, who assumed his role as U.S. leader in May.
The firm aims to remain competitive amid a slowdown in certain advisory services.
“To remain competitive and position our business for the future, we are continuing to transform areas of our firm and aligning our workforce to better support our strategy,” said Tim Grady, PwC’s U.S. Chief Operating Officer, as quoted by WSJ.
Meanwhile, PwC’s office in China is facing challenges after losing a major client, Country Garden Holdings.
This setback comes amid ongoing scrutiny of PwC’s auditing role for China Evergrande Group, which is embroiled in a $78 billion fraud case.
In response, PwC China has implemented cost-cutting measures, including layoffs, following the severance of ties with over 50 firms, including Bank of China, due to missed audit deadlines.
This restructuring marks a significant shift for PwC, which had managed to avoid major layoffs in the U.S. since 2009, setting it apart from competitors like Ernst & Young (EY), KPMG, and Deloitte.
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Layoff and Unemployment Report
Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.
First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.
Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.
That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.
The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.
US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.
Still, hiring remains strong.
Although the unemployment rate ticked up to 3.9%, it as seen the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.
Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.
“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”
“Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.
The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.
While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”
Ian Shepherdson at Pantheon Economics said in a note earlier this quarter: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”
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Also Read: Retirees Will Now Receive More Money For Social Security
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