PwC Advisory Services Layoff

Word is that PwC is sending more than 25% of its consulting staff, “Advisory Services,” to permanent “out of pocket” status.

As we speak, sources tell me that up to 1000 professionalswill be told they have no job, with many having their last day this Friday. The Global Leader of the Advisory Services Practice, Juan Pujadas, is rumored to be out and an internal turnaround guy from the Northeast said to be teed up to lead the practice or what’s going to be left of it. Cuts are said to be not necessarily focused on any one group, but spread amongst all, with each partner asked to sacrifice a few to make the numbers. Pujadas is one of the few partners expected to suffer an actual job loss. That’s just not how they do things there.

My contacts tell me that the partners have been attending workshops over the last several months to learn how to fire people.

So what went wrong? As if I hadn’t already told you what was wrong with this gang

Their growth targets for the last fiscal year ending June 30, 2007 were aggressive. They wanted to hit a US$ Billion and came up quite short. Partners were asked to take a cut in their payouts as a consequence.

Well, the audit partners could not have liked that much. When PwC sold what consulting practice they had to IBM in 2002, they also got rid of any one who actually knew how to do consulting. Recycling some more audit partners to try to revive the practice and hiring experienced consultants en masse the last two years was not going to work. The culture there does not accept outsiders easily. Consultants who knew what it takes to compete, and compete was what they had to do, were not going to function well under converted audit partners who didn’t know how to run a consulting firm.

There are some practices there that work well… Tax, investigations, a few other niches that play on their strengths. But much of the rest, including their internal audit practice which was pulled out of the audit practice and put under Pujadas in mid-2005, were nothing more than glorified staff augmentation practices. There were a few scattered technical experts who sold the work to the client, but not enough experienced consultants to actually manage the work on an ongoing basis. That’s not the audit partner style anyway, to actually be on the client site doing any work. The hands-on style I grew up with at KPMG Consulting/Bearing Point was not evident in the “consulting” practices of PwC. As we’ve seen, the audit practices have a hard time getting a partner to spend more than 2-3 % of their time on the engagement. That just won’t work for high-stakes implementation project.

So the audit partners have pulled the plug. Rather than rationalizing expectations, focusing on a few select practice areas and trying to gain something other than “assess and recommend” credentials, they’re retrenching. Probably a good idea, given all the cash that’s needed for their ongoing litigation.

My experience, and the experience of many of the “experienced” hires who have been through the PwC meatgrinder and spoke to me, is this:

Their partners are:

  • Secretive about goals, objectives and results.
  • Don’t answer emails if the question is unpleasant, avoid conflict, encourage get-along, go-along attitude.
  • Are better in a situation where they can judge past actions, not advocate or take a position on the future. (That’s an audit mentality not a consulting mentality.)
  • Expect a servile attitude from managers and staff.
  • Expect that servile attitude to carry forward to clients. However, clients lose respect when you don’t take a position, take a stand, make decisions.
  • Don’t know how to ask for the work, compete, or measure their effectiveness in delivering value to clients.
  • Don’t know how to leverage business development professionals to manage the sales process while the partners manage the sales content.
76 replies
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  1. Anonymous
    Anonymous says:

    Will PwC be the next collapse? Sure seems like they are bailing a sinking ship: layoffs across the board, inability to meet revenue and growth goals, public issues with clients (helllooooooo AIG).

    A lot of my professors used to roll their eyes when kids took jobs at PwC, and an audit professor once said PwC would be the next collapse, but I honestly didn’t think it would be allowed to happen: if PwC goes, the remaining firms will pick up 75-90% of the business, and then you would have a serious issue with the remaining firms.

    Second tier firms are in no position to absorb client engagements to size of PwC’s, either.

    I am reminded of Macbeth: “Something wicked this way comes”.

  2. Anonymous
    Anonymous says:

    Kind of in relation to the topic of possible collapses….a question Francine: As it appears more and more obvious that the future of the big 4 is much less certain than you are made out to believe in college, etc., what are you thoughts on getting your experience and getting out of public? The thought to leave has obviously crossed my mind, but I never thought it’d be so soon into my career (i’m a 2nd year, but am getting more and more anxious about the uncertainty in public accounting).

  3. Eileen
    Eileen says:

    I too was an experienced hire that PwC doesn’t know how to utilize. They prefer fresh out of school to mold into servile partners. Could that also be a generational gap? Most new graduates won’t agree to be obedient.

    As for the audit versus consulting mentality, PwC is still trying to locate their identity. They have SPA doing some consulting work, and when Consultants like myself in SPA actually consult, I was reprimanded on not following along with clients’ ideas and presented ideas that were different to client. I thought we as consultants were there to provide thought leadership? I must have missed out on some of their training.

  4. Anonymous
    Anonymous says:

    This is no surprise to most people that have worked or still (for now) work at PwC Advisory. There has never been a well thought out long term vision or strategy and lack of business accumen and down right greed when it comes to the partners was bound to catch up with them.

    Another huge red flag was when all these “catalyst hires” were brought in to jump start all sorts of new work, basically adding zero value, and began drinking from an already shallow pool of project work.

    Of course no partner would admit this was a mistake and kept these people on to leech off the hard work of others, killing morale and forcing the few good people who produced to leave the firm (which, thankfully I was one of those).

    Well, it finally caught up with them, so much for your “fry the small fish” operational approach. How’s that working out for you NOW?

  5. Anonymous
    Anonymous says:

    A couple of points:

    PwC will not be allowed to collapse because the EU have already said that they will break up the remaining three to generate competition if that happened. Neither is there any appetite in the USA. If KPMG did not collapse under the weight of their tax shelter scandal then the others are fairly safe.

    What we are seeing now is the effect of the economic slowdown plus a slightly more sensible approach from the regulator (i.e. AS5). Services always suffer when the economy slows and AS5 have taken hours and dollars away from audit. But the Big4 are still well ahead oif where they were 5 years ago. It is merely the pendulum swinging.

  6. Anonymous
    Anonymous says:

    Life sucks for everyone right with it and drive on. don’t dwell on something you have no control over. you feel you don’t want to stick with the company through the tough times, opt out and leave. if you decide to stay, stf and get back to work.

    it does not matter what job, industry, profession, etc you in, the test of adversity will come.


  7. Anonymous
    Anonymous says:

    I agree that economic slowing has something to do with PwC’s recent issues. But, AS5… please… EVERYONE knew that something like AS5 was coming, except apparently PwC leadership. They should have gone about a quiet house cleaning over a year ago. In waiting too long they hurt themselves and their employees who now will have a much harder time trying to find a new job. Just another wonderul example of how government intervention in the free market gives companies the wrong incentives, and employees pay the price.

  8. Anonymous
    Anonymous says:

    8 years with the firm, got laid off today.

    been asking for the last 3 years what we’re trying to do in advisory…
    guess i got my answer today

  9. fdefdffd
    fdefdffd says:


    This is kind of a different kind of comment/question.

    How much time do you have ot pack your bags when layoffs happen like this?

    From your post, I could not tell how long they gave the consultants. Maybe they are supposed to leave this friday, but when were they informed of this?


  10. Francine McKenna
    Francine McKenna says:

    Hi, my understanding is, in this case, the employees are being given no time, a day or two. Of course in individual circumstances this may be different and that’s not saying everyone’s packages are the same. One thing you can say about PwC they are very inconsistent in this stuff, which should make for some interesting potential suits.

  11. Independent Accountant
    Independent Accountant says:

    You write, “Bridges to bad people are best burned”. I agree, but note I met very few bad people at Big 87654 when I was there. I met many cowardly people, trapped in a system fraught with conflicts of interest who were afraid to speak out against them. I always felt free to speak my mind. Why? I figured the worst that could happen to me was I would get fired on some pretext then find another job. Still, I would eat. At some level I felt sorry for them. My experience: the vast majority of Big 87654 partners are cowards. Some of excellent capabilities, some mediocre, but virtually all cowards. They live in George Orwell’s 1984, the world of “doublethink”.

  12. Anonymous
    Anonymous says:

    Independent accountant said it very well. I work at another Big 4 and there are many similarites throughout. There are a few bad people (Unfortunately, some are in leadership roles) but most are cowards. They are also absolutely self-serving followers who have no concept of what a client relationship really is all about nor do they understand business development, creative delivery or how to solve customer problems. They are indeed mostly glorified staffing companies who profit most when legislation or mandates force initiative on the client to comply. The perception is that the partners of these firms are superior business folks – and in many cases there are exceedingly talented technical accountants (Typically in the transaction space and in the tax practice). The reality is that these companies have very poor advisory skills and typically overstate their capabilities to clients. The real problem is anyone who steps up and speaks out will be forced out or just won’t fit in and will eventually leave. To advance, you must toe the line and do what you are told – do not go outside the box! Think about Jim Carrey in the Truman Show…that is what it is like working in a Big 4. Lots of platitudes and very little inclination to do anything different, unique or (heaven forbid) valuable to a client.

  13. Anonymous
    Anonymous says:

    Amazing how a match struck in the middle of the desert with nothing to burn – but can be seen for 10’s of miles – can be turned into ‘a rampaging fire. . in the desert’. The similarities with the PwC “1,000 layoffs” is uncanny. Unlike the Anderson “issue”, changing the game slightly in advisory doesn’t come close to affecting a 149,000 person global organization. That said, to the 100 – 130 people that are affected, its a challenging fact. To their customers, they likely will only see a greater attention to detail and respect for client needs (for fear it could happen to them).

    Fun though seeing all the wizards out there with their prophecies. . . most of which lack the knowledge to use a wand – ah, assuming they had the skill to even find one.

  14. Anonymous
    Anonymous says:

    Above post is wrong. 120 was the SPA cuts a couple of weeks back. This is a new cut. Will probably be less than the SPA impact though.

  15. Francine McKenna
    Francine McKenna says:

    No. No spaces or faces. I’m neither 23 nor a rockstar, although I am single. Why do you ask?
    Find me on Linked In and my own website,

  16. Anonymous
    Anonymous says:

    PwC has < 30,000 in US, global figure doesn't relate in this context. layoffs are in the US. Advisory has about 5,000 staff in the US. the 120 figure are managers and directors only, no mention has been made of senior associates and associates yet. SPA seniors & below had same day notice. The SOX party is o-v-e-r

  17. fdefdffd
    fdefdffd says:

    I have never seen someone reply to blog posts this fast. Even at 2am i think it was last night, you replied to my comment a couple of minutes after.

    I want a blog so people can comment on it 🙁

  18. Francine McKenna
    Francine McKenna says:

    To my most recent commenter:I am fast and I am good. Too fast for some folks. They never trusted that I actually thought before I acted. If you want a blog, email me. It’s fun!

  19. Anonymous
    Anonymous says:

    Wow, it was amazing to see the posts today about PwC, as the comments mostly didn’t deal with the issue of consulting layoffs, but rather ranged from the “collapse of PwC” to the “partners are mostly cowards”. Talk about a herd (most of the posters today) gone wild.

    The reality of Big 4 consulting is that they can’t offer specialized services that others can, such as Bain or McKinsey. They also can’t serve any audit clients in any meaningful way. What they have generally have become is system implementers, doing low level IT work. And, a lot of that work is now being done “off shore”, at a far different cost model than we have here in the US.

    In the salad days of Big 4 consulting, that group had (by far) the highest rate per hour. Today, in the aftermath of SOX, the rate per hour for Big 4 consulting is the lowest amoung the business units (audit, tax, consulting), because they are not offering any value-add type consulting (e.g., strategy).

    Anyhow, rather than hearing about how cowardly audit partners are and hearing about how PwC might fail, one would think the posts would express concerns the layoffs have for the people impacted, and the consequences for professional employment here in the United States, as off-shoring is becoming the silent killer.

    And by the way, if you want to talk about cowards, lets talk about the countless controllers and CFO’s of companies out there that manage the earnings to please the CEO and the analyst community. That is the real story of cowardly behavior and manipulation. Why can’t the auditors detect that? Because most times, management hides behind “judgment” as the reason for changing reserve amounts. Go read FAS 5 if you want to understand the lattidude and subjectivity that is permitted under current rules.

    Final Four Guy

  20. Anonymous
    Anonymous says:

    “I love when folks who can’t cut it in Big 4 talk trash on their former co-workers.”

    Most people that leave public leave for something better. Public accounting jobs are not the be all and end all. I am in public but can see how it truly isn’t a good fit for some professionals.

  21. Anonymous
    Anonymous says:

    It takes nothing to cut it a big 4. Oh sorry, yeah it does, you have to be able to pucker up and kiss you know what. So to the blogger who insists that he can make it in the Big 4, it must be case that he is a big time ass kisser. Kudos to you, hope your lips don’t get too tired. I hear that botox helps.

  22. Dennis Howlett
    Dennis Howlett says:

    Francine – you don’t seem to have answered the question about the number of layoffs. A number of the anonymous posters think it’s 120 not 1,200. Do you have independent verification of the numbers?

  23. Krupo
    Krupo says:

    Nice list, I’ve attempted to turn it into a teaching aid. 🙂

    Wouldn’t it be funny if we created some kind of new-fangled audit textbook?

    Perhaps it’s not even too surreal to suggest that’s exactly what’s being done in real-time right now.

    Also interesting to see how quickly this turned into a message board for Concerned PWCers, along with a few rabid partisans/trolls.

  24. Anonymous
    Anonymous says:

    The venom about Big 4 professionals is to be expected. It starts in college, because the Big 4 only hire who they think are the best and the brightest. And those that don’t get invited to the party feel bad or resentful. Usually the filter for the best and the brightest are based on two critera: 1) the noisy or cocky students who are typically involved in student leadership or 2) the quieter types that actually have substance and some maturity.

    And, I see lots of category 1 people , and these are the people that create the perception issue that has been discussed so many times in this thread. Some of these people might even survive and make it to partner. But in my experience, most the people that get promoted to partner are primarily people of substance. However, I recognize some people slip through the cracks. Usually these partners get asked to leave within the fist 5 to 10 years after getting promoted.

    In any event, I know that Big 4 misses many opportunities to hire very good people out of college that might not have the 4.0 GPA or might not be extroverted. That is too bad, because in my experience the best staff people are generally those that have modest GPA’s plus a strong work ethic.

    In summary, I can understand a certain amount of resentment and hard feelings, but it would prudent to also recognize there is a fair amount of Big 4 professionals that are decent, hard working, and strive to do the right thing.

    Final Four Guy

  25. Anonymous
    Anonymous says:

    Not bad, you were only off by a magnitude of 10…coupled with your praise of BearingPoint, I can now see how the BearingPoint/Passport fiasco went down.

  26. Anonymous
    Anonymous says:

    Here’s the thing to most who are defending and ripping the layoffs – the truth hurts.

    There are way more than 120 people that have been let go. Personally, I know of 10 people alone in SPA in an East Coast city that were recently laid off. And this was the “third wave” of SPA layoffs. So there may be only 120 coming up, but there have been way more than that total and way more to come (if you say there isn’t, you are just being ignorant to the situation around you). This is in addition to the large number of individuals who just up and left recently, due to poor raises, not enough work, poor morale, better opportunities and so forth.

    In addition, SPA is rumored to be merging with Advisory. In which case, even more layoffs will occur. Don’t think so? Then why are there weekly calls about sales / potential sales with every manager, senior manager and partner? And when you have nothing to report at these weekly meetings, you receive a call 10 minutes after the meeting has concluded. There will be more cuts once the merger of SPA and Advisory has occurred. Walk around the office next time you are around. Do you think that there won’t be cuts when there are still a lot of people sitting around the office with nothing to do? And if Core Assurance hours continue to go down, one of two things are happening. 1) They are taking back more of the SPA hours (if they haven’t scrapped them all completely within business process), which will result in more SPA staff on the bench and more layoffs. Or 2) They are making cuts of there own.
    It happens in other businesses as well. It isn’t the first time this has happened in PwC. And it won’t be the last. For many that stings. But if you truly open your eyes to what is going on, you’ll realize the Firm can not continue to function with this many on the bench and such under performing numbers.

  27. fdefdffd
    fdefdffd says:

    So it looks like this is turning into a discussion forum.

    Francine, I was wondering if you can make a post about how to become a partner in the Big 4 (if someone wants to i mean, i know this isn’t the goal of everyone)

    Particularly, can you talk about the ASS kissing that is necessary. Gen Y (ie; me) are not really too good at ass kissing. More than anything, we need our asses kissed.

    So how can new recruiters fresh out of college compete to make it to partner level.


  28. Anonymous
    Anonymous says:

    Indeed, lets not go personal with the blog here – I really don’t want to know about Francine’s work habits at PwC, as we should be interested in the subject of the day. While I almost always take a view counter to hers, there is no room for personal attacks etc etc.

    Final Four Guy

  29. Krupo
    Krupo says:

    People tend to attack others online when they achieve any degree of popularity. The phenomenon of trolling. Weird, but common. I would ignore it. 🙂

  30. Anonymous
    Anonymous says:

    I am in PwC Advisory. There were 120 managers, directors and managing directors let go this week nationally, not 1,000 people. The people came from a variety of specialty areas and had either weak sales, weak billable utilization, or some combination thereof. Juan Pujadas is still in command and there is no evidence that will change in the near-term.

    PwC will not be allowed to fail for a host of reasons, and is fiscally on a good footing.

    Agree though, with the comments around culture. Those cultural negatives continue to hold the firm back.

  31. Victor
    Victor says:

    Re: Intern Abuse

    Who cares? Guess what? Interns set around a lot of the year with nothing to do. This is a result of a cyclical business and the fact that a lot of people are reluctant to give interns work (at least in my experience) because they either don’t want to risk having to redo the work later or they want the billable hours to themselves.

    When I interned for a regional firm I was desperate for stuff to do sometimes. I once got sent to help a partner’s wife with some charity event. This isn’t abuse.

  32. Anonymous
    Anonymous says:

    Do you guys think the layoffs in SPA or Advisory will affect those who have interned and accepted a job offer? A friend of mine interned in SPA and accepted the offer and is supposed to start in the Fall. Do you think they will take back the offer because of the recent layoffs?

  33. audy
    audy says:

    hello all,

    I’ve been reading the comments… all very interesting, however I cannot figure out what “SPA” stands for. Can anyone help me out here? Thank you.

  34. Francine McKenna
    Francine McKenna says:

    @audy – SPA is PwC’s IT and Security audit practice. It stands for Systems Process Assurance.

  35. Anonymous
    Anonymous says:

    I interned with PwC, now I am finishing up with my masters and am set to start working with another Big Four later this year…after hearing all you I think I am going to go ahead and pursue another masters so I never have to set foot into the office.

  36. Anonymous
    Anonymous says:

    In response to :

    “Do you guys think the layoffs in SPA or Advisory will affect those who have interned and accepted a job offer? A friend of mine interned in SPA and accepted the offer and is supposed to start in the Fall. Do you think they will take back the offer because of the recent layoffs?”

    This will not effect your friend at all..most if not all layoffs are at the manager and above level.Plus, why would they hire you just to fire you within a year…they need at least 2-3 years to evaluate your potential

  37. Francine McKenna
    Francine McKenna says:

    If they over hire, which they all seem to have done in the past few years, they won;t wait 2-3 years to “evaluate your potential.” All of the firms, including PwC have let go staff with less than two years.

  38. Anonymous
    Anonymous says:

    Pretty scary stuff to listen to. How are things doing @ KPMG IT advisory space. Me a fresh grad, goin to start this sept with them. Pretty scared of lay off term as i would be on H1 visa.

  39. Anonymous
    Anonymous says:

    I don't think PwC is going to collapse at all. I am a 2nd year in the assurnace practice and I have to say that I am a lot busier this year than the 2nd year associates last year. The firm seems to get more and more clients every year. It just seems to be like PwC is taking all the bullets only because we are the biggest right now. There are people taking about layoffs, litigations, etc. at PwC. The same things are going on with the other firms (E&Y, Deloitte, KPMG) as well. In fact, some of the other firms have laid off more people and still laying off people.

  40. Anonymous
    Anonymous says:

    I was an experienced manager in PwC’s Systems Process and Assurance (SPA) practice and I have never seen such arrogant stupidity by partners and senior leadership in my entire 20 year career. The promoted this guy to partner who had absolutely no certifications and credentials and let this idiot used car salesman run the practice. Their moto “we aren’t the cheapest but we’re the best” is really paying big dividends for them now. I left the firm and won a huge overtime pay settlement as payback for the way I was unprofessionally treated there and I hope more professionals do the same.

  41. Anonymous
    Anonymous says:

    That’s funny because my partner told me the same thing, we’ll see how that plays out.

  42. Administrative
    Administrative says:

    Does anyone have any insight on what the adminstrative layoffs have been like for any of the big 4?

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