PwC Australia Announces 338 Layoffs in the Wake of Tax Leak Scandal and Major Client Contract Termination

PwC Australia is set to lay off 338 employees, amounting to 4% of their workforce.

pwc australia layoffs
pwc australia layoffs

Pricewaterhouse Coopers (PwC) Australia is laying off 338 employees.

This decision comes in the wake of a national tax document leak scandal and the abrupt end to a 55-year-long audit relationship with one of its key clients.

Westpac, Australia’s fourth-largest bank, terminated its 55-year audit relationship with PwC Australia, a decision influenced by a national tax document leak scandal that had cast a shadow over the firm’s reputation

A PwC Australia spokesperson explained that these layoffs are a result of the challenging economic climate and the firm’s smaller size since it spun off its government consulting division during the height of the tax leak scandal. This division, now operating as Scyne Advisory, has seen roughly 1,400 out of PwC Australia’s 9,000-plus employees move to the new firm.

The decision to lay off 338 staff members accounts for about 4% of the remaining 7,600 employees at the firm. Notably, some of those laid off had previously been offered positions at Scyne Advisory, only to have those offers rescinded.

PwC’s troubles are not isolated to its Australian branch. The parent company, PwC, headquartered in the United Kingdom, recently announced plans to reduce its workforce by approximately 600 jobs.

PwC, found itself mired in controversy when it was revealed that a former partner leaked confidential government tax plans and used them to secure contracts with international corporations looking to revamp their tax structures in Australia. This revelation had far-reaching consequences, tarnishing the firm’s reputation and leading to the resignation of several top executives.

The most recent blow to PwC Australia came from Westpac Group, Australia’s fourth-largest bank by market capitalization.

Westpac decided to terminate its long-standing 55-year audit relationship with PwC. The decision, made just hours before PwC Australia’s announcement of job cuts, did not explicitly reference the tax leak issue but instead indicated it was part of “best practice for audit firm rotation”.

PwC had been auditing Westpac since 2002, and before that, PwC partners and their predecessor firms had been the bank’s auditors since 1968.

Australian regulations stipulate that auditors must not spend more than five consecutive years out of seven auditing a company, though firms can stay on for longer periods by rotating the staff involved.

PwC’s lead Westpac audit partner took on the role less than two years ago, in December 2021, as per a statement from Westpac’s governance this month.

A spokesperson for PwC Australia expressed understanding of Westpac’s decision and expressed pride in the firm’s time as Westpac’s auditor.

In the 2023 financial year, Westpac paid PwC approximately $22 million in audit and audit-related fees, accounting for roughly 1% of PwC Australia’s $3.4 billion in revenue for that year.

Source: Reuters

Gerard Thompson
Gerard Thompson

Gerard Thompson, a seasoned tech industry worker understands the struggles of facing layoffs firsthand. Having navigated the uncertain and daunting world of job loss himself. Gerard is the founder of JustLayoffs.com

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