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.
Administrative,
PwC “consolidated” and “streamlined” admin last year (2008). There were layoffs, not a lot, but several in each office. Net result was that admin support for parners stayed largely the same but support for lower-level “executive” positions pretty much evaporated. At the same time, the engagement set up and billing processes were changed to put more of the burden on the same “executives” who no longer had much admin support. Result: much unhappiness, both for those laid-off, and for those left behind.
— Tenacious T.
Thanks Tenacious Good to know!
The problem at PwC is the lack of strong leadership. but what can you expect with a partnership.
As the boat sinks, everbody has to agree on what to do to save it, yet that seems impossible with the number of decision makers involved.
You are right on the make about the servile points.
PwC wants accounting slaves to crnch numbers, not free thinkers that can come up with time/money saving ideas. That would reduce billable hours.
This all stems from the merger of the boutique accounting firm PriceWaterhouse and the fast-food equivalent I of the accounting world, Coopers and Lybrand.
The difference of the two firms was like night and day.
Then started the cleansing of the individuals that had devoted thier lives to makeing the firms work.
Some would say .. C’est la vie!
If PwC fails, good ridiance to the fools that could not tell the world about Fanie Mae….
or the current Satyam Computer Services crimes.
oh, btw… t
he BIG PLAN TO SAVE MONEY in PwC is to offshore IT support to PwC India.
One has to wonder how US regulations apply to forigen nationals that have complete, unfettered access to confedential information.
hmmmm….
Bobwithaccounttemps —
1. Nice name, there.
2. I don’t think U.S. privacy laws will have very much impact on moving IT support to India. Canadian privacy laws are tougher, and European privacy laws are tougher still.
3. Re: PwC’s leadership, did you see my epistle that Fran called “Music for Chameleons”? I think I make some of your points there (but hopefully in a nicer way).
4. In my epistle I am speaking about all of the Big 4, not just PwC. I don’t think the merger of PW with C&L was the root cause of firm leadership problems. I think leadership problems are endemic to all of the larger partnerships (including the mid-tiers). Leadership problems are structural (i.e., a democracy won’t work after a certain size point is reached) and also inherent in the review/promotion process, where partnership-admits are chosen for reasons other than (a) business case, and (b) competence.
5. I certainly hope none of the firms fail, but I won’t be overly surprised when one or more do. The fact of the matter is that fundamental change is required, but the current partners have too much of a vested interest in protecting and perpetuating the status quo. Without a looming failure or major outside intervention, there is no perceived rationale for the necessary change.
— Tenacious T.
Quote: “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.”
Please tell us how you went about obtaining your settlement.
Could not find a topic to fit this in.
I left PwC WFP. I gave my required notice and I was told they would exit me in early March. My paperwork stated I gave the required notice per my EA and I would be paid for that period (all of March). I started my next job at another Big 4 and just received a letter from PwC asking for the money back. Called them, sent the payroll/debt group the letter, called my former HR manager about the issue. Called the other day for a status check, and I was told I might have to pay back… they are looking into it. Seems odd that I have a document that clearly states they would pay. This does not make sense to me since they chose to end it sooner then the notice period. I guess if they drag too much longer time to get a lawyer to send them a nice little letter. I think they have bigger issues then this to deal with.
My first post and I apologize that it is rambling…but here goes…
Well, another April is here at PwC Advisory with multiple hours being taken up with “performance evaluations”, aka PFF’s, “Self evaluations” and the 4 month “annual review” process, at the end of which most are judged “average” and not eligible for the bonus pool nor for promotion.
So much time being spent to enter schedules into “Retain” scheduling system on a daily basis, and bonuses supposedly linked to whether your time scheduled matches the actual time you charged to clients. Reason for this? No one is sure…especially since so many are exempt from scheduling. Wonder how management is able to send us warniings that our hours are not enough above “standard” to justify our salary? In other words, if you were expected to work 55 hour weeks and worked 48 hours instead, you are not in compliance. I thought that consultants were exempt from hourly reporting…we’re not paid by the hour and do not receive overtime pay…How can you be exempt if your hours are being tracked and you are bonus eliglble based on accuracy of forcasted hours? Actually received an e-mail today telling us to make sure our time scheduled matches time charged…Are we supposed to provide client service or worry about whether we worked 10 hours but scheduled 9 hours in the Retain system today?
@small2BIG4
Drop me a email if you would like an attorney referral for someone who will review your docs and write them a nice letter.
Francine
58 – A “reason” I’ve heard is to match expense reports with actual worked hours/locations. I’ve always suspected it’s just to figure out efficiency/profit margin per work, etc, and see who’s on the bench/at the beach.
Anony @ 58 —
Sounds like PwC Advisory is using the “Retain” scheduling system as a planning and forecasting tool. Measuring actual hours charged against planned hours charged keeps the system honest (in theory) and increases the accuracy of near-term planning (also in theory).
With respect to the bonuses you say are “supposedly linked” to forecasting accuracy, my sources at PwC tell me that you should not obsess over the issue. If your utilization is higher than standard, and you are rated a “1”, then your resulting bonus will be far higher than the measly bonuses being offered for time forecasting accuracy.
Which is a good reason to keep your head down, focus on your work, and take extra time on your “PFF” evaluations and input into your annual review. That would seem to be time well spent, if you are looking for compensation commensurate with effort.
— Tenacious T.
#31 – This is how you become partner in the Big 4.
Step 1: You take a bunch of senior managers and put them in a large room with lots of doors.
Step 2: You make them mill around for a while (this is called seasoning).
Step 3: Then the lights go out, one of the doors is opened and someone is yanked out.
That someone has just been made partner!! There you have it.
My experience with PwC is they line em up shoot bannanas at em with a sling shot and the one that catches the bananna in their mouth makes partner.
@TT……
Retain is so old and vulgar the new thing is to hire people from India to attempt to make the German multimillion dollar SAP system actualy do something besides spitting out blank rreports.
I don’t have any special insight into PwC, but I am reliably informed that the actual process works very much like this:
Step 1: All Associates are thrown into a swimming pool. But because one swimming pool isn’t big enough, there are multiple swimming pools. Some are called audit, another is called consulting, and another is tax. Within those pools are smaller pools called client engagements. Some pools have sharks, other pools have minnows, still different pools have a random combination of storms, waves, sharks, etc. Some associates get thrown into an administrative pool which is shallow and has very little going on. No matter what pool an individual swims in, that individual is expected to perform at roughly the same level as everybody else.
Step 2: Periodically the swimmers are evaluated. Some individuals drowned, or are perceived to have drowned. Others successfully treaded water. Still others swam a few laps. A very few swam a lot of laps at Olympic speeds (maybe their pool didn’t have any sharks, or maybe it did and they were swimming away). The smallest group of all hid on the side of the pool but successfully fooled the evaluators into thinking they swam many laps using firm-approved stroking techniques. (Double-entendre intended.) That last group is called “high-potential” or “early promote candidates”. The evaluators decide who swam well largely based on attributes that have nothing to do with swimming results. If enough Associate swimmers haven’t drowned during the evaluation period, some will be randomly chosen for sacrifice and pulled out of the pool, and shown to the door.
Step 3: After a couple of years of swimming in a pool, the successful swimmers are removed from their pools, given weights to put on, and then are put into smaller pools where they have to oversee the swimming efforts of the staff pools. Note, however, that these “Senior Associate” swimmers are weighted down and can only raise their heads above the water for brief intervals, and only with great effort. Thus, their ability to effectively monitor the staff swimmers is quite limited. Also, these “Senior Associate” pools are very rough, with lots of sharks, and sometimes there are big bolts of lightning from angry partners.
Step 4: Repeat as necessary over a period of years, each time taking a smaller group of swimmers and putting them into a smaller pool, farther and farther away from the other pools — each time adding more weights and tying down hands and feet. Survival becomes harder and harder, but the oversight requirements grow and grow. The lightning bolts from angry partners grow more frequent. Firm-approved stroking techniqes (hee) are changed at random intervals. Success, and even survival, becomes less and less certain, so each swimmer needs to devote more and more time and effort to swimming.
Step 5: When a very, very few swimmers reaches the final pool — the one that is the roughest and farthest away from all that is happening elsewhere, they are called partners. The weights are taken off and replaced with gold watches and expensive swimming suits made from the finest silk in all the land.
Step 6: The partner pool is actually another series of pools that use the same management techniques to select firm leadership. The main difference is that the main threat now comes from other swimmers, who attempt to drown as many other partner swimmers as possible in order to ensure their own success. It’s a zero-sum game.
Step 7: The final-final pool is senior leadership of the firm. It’s a jacuzzi made of gold, set on a tall tower in the middle of a plain. The view is wonderful, but there’s nothing to see because all the swimming is being done on the other side of the mountains, far, far away from the tower. Every so often, senior leadership reaches out of the jacuzzi for something. The fact that the “something” wasn’t immediately provided prior to the actual reach upsets senior leadership, and then a new firm policy is enacted that makes the swimmers work harder. Sometimes the new policy changes the firm-approved stroking technique; other times the new policy requires more drownings and/or sacrifices. (The latter ones are called lay-offs.)
Or maybe I’m just being cynical?
— Tenacious T.
@TT
No, you’re no more cynical than I am. Are you my male alter ego? You are brilliant. Too bad you have a full time job or you could write for free for me. 🙂
Francine
@ TT 64
Haha. Nice! I was going to use the rabbit on an ongoing, high-powered tread mill (a.k.a. staff trying to make partner) reaching for a dangling carrot on a string (a.k.a. partner title) analogy.
On a serious note, @ 31, if at some point you decide the partner track is not for you (understandably so) you might want to consider a career in academia. I know it’s another 3 to 4 years of school and I am well aware of the opportunity costs. But as a Gen Y’er myself, I would see it as a more fulfilling career path in which I think my work would add real value. I mean…there’s a reported shortage of accounting professsors due to an increasing number of current ones on the verge of retirement. Plus, after you attain a PhD the pay is very nice – you make half as much as partners but guess what? That’s spread over the course of 9 months, not 12. That leaves roughly 3 months for you to spend time with family, do research that interests you, etc – a much less stressful job than being a partner. I think it’s something to look at, at least.
FM @ 65 —
“Too bad you have a full time job or you could write for free for me.”
Yes, too bad we are not both independently wealthy so we could write sketches for the Accounting Comedy Circuit.
Also, I haven’t forgotten about that guest blog on Engagment Management. It’s in process, I swear. It’s just that dang “real life” that keeps getting in the way(including as you noted a full-time job, plus the whole family and children thing). Also I started outlining a technical book (in my specialty field) this week, because I had too much idle time. But it’s coming. Trust me. Missed deadlines? Now I feel like an accomplished author!
Also the alter ego thing? Great minds, etc.
— Tenacious T.
@TT
I have some Illinois Mega Millions lottery tickets I haven’t checked yet…
Actually I really like the pool analogy. You might consider expanding that to a guest post on career path in Big 4 and all the sharks, “snickers bars”, cold water, dirty leaves, inflatable rafts full of hot air, and surface scum you can run into along the way.
Francine
The truth is that a lot of these “layoffs” and the ones to come that FM speaks about in Audit have been a long time coming. These people are what we call “closet 4s’ at PwC, based on the performance scale of 1-4. They are people that have slipped by in the review process because we needed the bodies, and now that we don’t they are going to be evaluated for what they actually are, people that don’t fit our performance culture. If you want to make news calling it a layoff, do it, but in reality these people would have been fired a while ago if it wasn’t for 404 etc.
@69 6:44
I’m curious… I heard the term “performance culture” while I was at PwC but never heard a good definition of it from a PwC perspective. Care to elaborate in terms of fit, etc. ?
Francine
@69 anonymous
Just curious as to what makes one a ‘closet 4’ as opposed to a 3 or better in your office? Bringing home an engagement with a $50k gain as opposed to $70k? Having 107% utlilization as opposed to 110%? Missing 3 hrs work because of a medical emergency? Actually discovering an exception that couldn’t be swept aside? Those seemed to be among the “factors” in my office..
In this case, the “KYC” would refer to PwC knowing their contracts, meaning their employment contracts….
I’m tired of coming to the comments section in search of something tangible that would help people who feel they have been wrongly terminated or treated abhorrently while employed at BIG 4 and finding vague numbers on lay-offs in vague groups, vague statements about legal recourse, etc. So, I decided to post this, hoping it may help those already let go or those soon to be departing from PwC come the end of the FY09 review process.
VERY IMPORTANT FOR EVERYONE AT ALL FIRMS, PWC OR NOT, TO KNOW WHAT YOUR ENTITLED TO SHOULD YOU BE “PERFORMANCE COACHED OUT”!!!!!!
This is the actual verbiage from a client service manager level employment contract at PwC:
“5. Termination of Employment.
a. Termination by the Firm. If your employment is terminated by the Firm for reasons other than professional, legal, ethical or Firm policy violations, you will be provided under the Firm’s Notice/Severance Policy for Certain Employees (the ‘Severance Plan’) with: (i) one month’s notice, if you have bee employed for more than six months but less than two years; (ii) two months’ notice, if you have been employed for more than two years but less than five years; or (iii) three months’ notice, if you have been employed for five or more years. The Firm reserves the right under the Severance Plan to pay your base salary in lieu of continued employment for any or all of the applicable notice period.”
I was told by a partner that the Feb 08 manager/director “reduction” provided 6 weeks severance to those individuals across the board. 6 WEEKS??? Talk about a random number (seems like A LOT of things at PwC are pull out of thin air these days). I’m assuming a director would be due a better, if not the same, severance per their contract. And, I’m pretty sure that not all these people were employed for less than two years (I can actually think of one director I know who most definitely wasn’t). And, I’m also pretty sure these people were all taken by surprise, meaning who the hell would know off hand what’s in their employment contract when they’re being fired AND who the hell would probably think to look at it in the few hours they give you to pack up your sh*t and “separate” from the Firm.
PwC, I’m sure knowingly bets their “HOUSE” that most of their employees will not know what they’re entitled to so they offer their random 6 weeks severance off the bat. If you don’t know what you’re supposed to get, good for them. If you do, well, they won’t believe you (HR that is) so make ’em dig up your contract. Or, call PwC SSC (HR Hotline 866-470-3000) to get it yourself. If you’ve been let go, wouldn’t hurt to see if they gipped your or not. I’m assuming they would have to provide a copy of it to you, current employee or not, and if they don’t I’m pretty sure you know why.
From what I recall, staff agreements probably provided for the 6 weeks but it may have been staggered by years of service as well for these levels. Maybe they were generous with Associates/Sr. Assocs but my hunch is they weren’t!
If you weren’t given what you were due per your employment contract, it may be worth looking into suing the Firm for breach of contract. I’m not sure what the statute of limitations would be or if it even is a valid claim but weren’t the AIG “Bonus Guys” threatening the same (on a much bigger scale of course)? Wouldn’t it be something if this turned into another big scandal for PwC…
FM does a great job with her site, providing valuable insight and content, while not specifically naming names, at least pointing to the Firms whose practices are pure CRAP. But let’s not make FM shoulder all the burden. I hope people who read this site will at least provide what info they can, being as specific as you can while keeping your anonymity, to help others who may be struggling with some sort of blatant BIG4 injustice.
To the PwC Partners who read this blog, get your (sh*t)House in order. To those still employed and either loyal on the partner track or just happy to be out of the unemployment line, remember you’re just a number away (3 or 4 take your pick) from being “coached out.” Know where your true loyalties should lie. To those already out, if you have any information that is TANGIBLE, why not share it?? You don’t have to name names or be too specific, but really, you’re out, so what do you have to lose?
@69 Closet 4s??? Hmmm, maybe someone should take a look at HR or the parters giving HR directives? How is it that HR or the partners don’t know the standard severance for each level? Really, given that this coaching out is even occurring mid-year now there, how many tag team HR/Partner conversations will it take before you can “Retain” (pun intended, dweebs) that info?? Perhaps, the closet cleaning should start there??
@FM, thanks for your blog! Also, might be helpful for some to re-post this under the DT layoff section and/or your What I’d Do post….
@KYC PwC
Thanks so much. As you know, I am limited in giving detail if I don’t have hard docs and info like what you have provided. I am also limited in that if you send me confidential docs directly, I may not be able to legally repost them. But if you post them in comments first, you are not jeopordizing my ability to continue to inform others.
I will repost this info in a new post focused on the PwC approach. I received an update on the PwC wage and hour class action in California also today from Bill Kershaw. If anyone in California is interested in that case or has info that can help them, please call Bill at 916-448-9800.
Francine
Asking for clarification….so as a hire with 10 months in, they are supposed to give me a month’s severance if they counsel me out?
The phrase at PWC these days is “HIgh performance culture.” Not sure what exactly it means, but I assume it’s what they say the person doesn’t live up to when they let them go.
Have heard of two more firings in tax, but of course, that is only people I hear about via my friends, there are probably others. One was a senior, the other a third-year associate. Wasn’t surprised by the associate–he was older and I think they were really starting to hammer him for nitpicky things in his feedback at mid-year.
Got at least one “goodbye” e-mail sent out to the whole office from someone in Audit–don’t know the person or how they came to leave the firm.
@ 74
I believe so. You should really check your employment agreement, as the severance differs according to staff level (the example was from a Manager employment contract). I’m not a lawyer, but my understanding is that violations as stated in the contract are things such as independence, CE requirements, not stealing firm property, etc. Professional violations would not include performance issues (I mean what exactly would you have violated?? The so-called “high performance” requirement? I’d like to see that documented and stated as a professional requirement somewhere). The only thing I can think of that would really fall under “professional violation” would be working a second job or something related to being a CPA, etc–meaning NOTHING PERFORMANCE RELATED. Also, I would assume professional violations would be something intertwined with the others (legal, ethical) such as signing off of bad/fraudulent financial statements or taking bribes, gifts, etc. from clients. If it does fall under this category, why isn’t it explicitly written in there?? I mean, everything else is in there, non-compete, what constitutes Firm intellectual property, etc. However, if this becomes an issue with A LOT of people who were let go w/o severance, you can bet they’ll try to wiggle out of this mess somehow. I’d like to see how it would play out legally, in a PUBLIC forum.
I was “counseled” out and given my severance (although they did try to push a lesser amount than I was owed initially–bet they didn’t think I actually READ any and everything I was required to sign there). You can find your employment agreement on kcurve under your personal documents. If not, request a copy from HR SSC. They have copies of everyone’s employment agreement.
Side note: It’s totally disgusting how they aren’t giving people what they are entitled to as stated in a contract THEY require YOU to sign. It’s just another example of how PwC is trying to get away with side-stepping the whole “lay-off” issue.
Layoffs continue at PwC and more to come…..