Updated: PricewaterhouseCoopers Cuts Hundreds of Internal IT Professionals
This story was originally published July 29, at 21:35 PM CST.
In a move that was too big to hide, PricewaterhouseCoopers on Thursday cut between 500-800 professionals from its internal IT organization.
Bay News July 29, 2010: PricewaterhouseCoopers has announced that the company will be cutting 500 jobs.
Jonathan Stoner is one of the tax advisory and consulting company’s public relations representatives…
Stoner says the changes are taking place across their IT organization, of which the majority is in Tampa.
As of Thursday, there are 1100 individuals and they plan to cut 500 jobs, leaving the IT division with 600 employees. The company says the workers were notified Thursday afternoon. They haven’t been notified of any sort of severance package, but the company felt it was important to give the workers a heads-up and the time until the end of the year to apply for other open positions.
Multiple sources are telling me the number is closer to 800 and the reported 500 number is just and exercise in semantics. The additional 300 professionals are those who will not be offered an opportunity to apply for jobs with the rumored outsourced services provider, Tata Consultancy Services (TCS).
Updated August 3, 2010: Based on later reports it looks like very few PwC professionals will be offered an opportuntiy to apply for positions with Tata. Instead, PwC professionals in the affected groups are being told to apply for the remaining ~600 positions. Decisions will be made about who will stay and who will have to go in December by the end of August.
Which US IT teams are impacted?
Our analysis revealed opportunities to share common approaches in Project Services, Infrastructure Operations ﴾including Data Center Services﴿, IT Governance and Process, Solutions Center, Program Leadership, Security and Enterprise Architecture. We will 1﴿ consolidate efforts between our UK and US IT teams, 2﴿ change roles and responsibilities of some roles to fit a sourced delivery model, and 3﴿ use a common offshore vendor, TCS. This will result in headcount reductions.
If my job is transitioned, can I go and work for the provider?
If your job is transitioned as a part of our move to a global delivery model, you may have the opportunity to interview for employment with the provider. There will be a very limited number of roles that will be eligible for hire by TCS. You should discuss this possibility with your coach. Though there may be such opportunities, TCS is not obligated to make any offers of employment to impacted individuals.
My sources tell me Tata professionals will be moving into the PwC data centers in Florida and Atlanta. PwC will retain ownership of the data centers and equipment.
We just built a new Data Center. How does this affect it?
PwC will continue to own the Data Center and its equipment; however, the majority of Data Center operating roles, except Facilities, will be provided by TCS.
It’s a shame because Tampa professionals were asked to move to Atlanta barely two years ago, and hundreds of internal services professionals were forced to move to Tampa to keep their jobs a few years before that.
From what I can see, TCS does not have a service delivery center in Florida or Atlanta, another location where PwC recently unveiled a new data center. So it’s not clear to me how this “apply for open positions” part will work.
It’s also not clear to me that, as spokesperson Mr. Stoner describes it, “PWC is making these changes as part of a thoughtful, strategic plan that will allow the firm to best serve its clients.”
I recently told you about PwC’s new joint venture in India to provide, for now, only internal client service support to PwC member firms worldwide. The US firm is the vast majority owner. I’ve also been told that PwC bought a firm in Uruguay last year and will also use that location to offshore client support and internal support activities.
Added July 31: In addition, BearingPoint Business Consulting Pvt Ltd sold substantially all of the assets of its global development center in India to PricewaterhouseCoopers. This asset sale was part of a larger Section 363 sale under the Bankruptcy Code in the U.S. The financial terms of the transactions were not disclosed.
Professional services firms, especially ones wracked by high litigation costs and lower fee income are loathe to spend money on internal activities. That requires 100 cents on the dollar bucks to come directly out of partner’s pockets. My suspicion is that the Indian joint venture was a move by the US and the global leadership team (an extension of the largest, most powerful member firms such as the US and UK) to take money out of the hands of uncontrollable Indian partners. But India is not yet ready yet to take on what’s needed.
It may also be true that ambitious plans to cover needs internally via the Atlanta project and improvements in Tampa just got too expensive and took too long for the annuity income tastes of most partners. PwC is shipping their employees off to TCS unless or until they can put the money back in their pockets with their own facilities off shore and leverage them for offshoring initiatives for clients as well.
Updated August 3, 2010: In any event, PwC admits, in an unprecedented press release, that there is no severance offered because they are giving professionals until the end of the year to find other jobs.
It appears based on sources reports that severance wil be offered to those who choose not to apply for one of the remaining PwC jobs and for those who are not selected. This enhanced severance is, of course, subject to “satisfactory” performance at the firm’s discretion and requires employees to sign a legal release.
To be eligible for enhanced severance, the impacted employee will need to meet the following criteria:
- Work until the end of the scheduled transition period
- Maintain a satisfactory level of performance as determined by the firm
- Sign and return an Agreement & Release in accordance with its terms.
Standard severance will be available to impacted employees who separate from the firm prior to the end of the scheduled transition period and who maintain a satisfactory level of performance as determined by the firm.
There’s a great new update on this story by Jeff Harrington at the St. Petersburg Times, Sunday August 8th. Read the whole story here.
PricewaterhouseCoopers has cultivated an image as one of corporate America’s upper-tier workplaces. Competitive pay. Great benefits. A perennial on Fortune‘s list of Best Places to Work.
Human resources experts with the company have preached to clients about effectively managing workers and using layoffs as the last option in times of crisis.
However, interviews with a half-dozen current and former Pricewaterhouse employees support a different picture of a financial evolution within the company in recent years. The accounting and professional services giant, known as PwC, has quietly and methodically slashed hundreds if not thousands of well-paying jobs, offshoring many functions to cheaper labor overseas…
Starting Monday, the dress code for IFS is changing. From this point forward, all IFS personnel will be required to wear black slacks and a red uniform shirt from the original Star Trek series. There is no relationship between this wardrobe change and our thoughtful, strategic plans.
That is all.
actually “PwC is shipping their employees off to TCS” is untrue. TCS *may* have positions open, but there’s no guarantee.
@Anonymous #2
Point taken.
You will be seeing a similar anouncement from another big 4 firm in the next 30 days.
What other positions are making up the supposed 300 additional people being cut? Have they been informed yet? Thanks FM!
The most likely way to find another position with PwC is to go outside of IFS and into one of the lines of service.
This has been brewing for years. The IT managment at PwC should have been fired years ago.
For instance, these guys bought millions of dollars of tape backup library equipment from StorageTek and then canceled the project and left the equipment sitting in server rooms across the country, unused on pallets, for five years. I was working out of the Rosemont office an the time, and the entire reason they canceled the project was the IT staff at the then Randolph st. offices were incompetent individuals promoted out of the mailroom. They were nice people but not qualified!
Its a good thing that Sarbanes-Oxley dosen’t apply to PwC cause if people knew how they run things nobody would trust them with a dime.
Can hardly wait to seem them go the way of Enron. Such a shame since PriceWaterhouse was a great place before the merger.
Actually we were given the details of what will be our severance packages in the event that we’re not selected to stay with the firm. That part of your article is incorrect.
@ In All Fairness
Re: the severance or not…I was just quoting from the article that came out first since it seemed to have been handed the announcement by PwC. Others have said on the GoingConcern.com site that, of course, the severance is always dependent on how long you can hang on if not placed right away in another job. Screw up, look at anyone the wrong way, make any false move and it’s all “subject to” their discretion.
I was offered early retirement in Feb after 20 years with the firm. and took it. The firm changed a lot after the merger, some for the better, but much IT talent was wasted in offices while upper management got all report happy. Not very agile, many initiatives “died on the vine”, people in offices not utilized fully.
The tech support needs are quite specific to the client service staff and require timely turn around so good luck with the India support desk. No one can get anything done without their PC, BB and connectivity.
After the merger there were more levels of hierarchy more meetings, more reports, more metrics…loss of job satisfaction.
Thank you Francine for updating me on PWC US operations at the moment.I was looking forward to working in Assurance LOS in New York NY US.PWC US have just upgraded the recruitment system & send me an email.The issue is most of the world uses Chartared Accounting(CA),but in US CPA is used as a license/certification.The visas need to be sorted out,even though i am receiving many Global mobility emails from PWC.
Your input is very important,as gives me vital information regarding PWC US.Keep us updated.My clients will be in Banking & Capital Markets (FS) which hasn’t fully recovered from GFC.
Your last article on American Insurance Group (AIG) was really informative.The web is much more tangled with Goldman Sachs,AIG are all interelated with dericatives.Your last article was regarding Cassano & sudden weaknesses found by Internal Auditors in the wake of inquiry,
Thank you very much for updating me.
Just an opinion from you Francine “Which PWC firm is the best US or UK”?Most of the services & PWC Handbooks are issued from PWC London Office.London office is a registered office on PWC website.
PwC is going to implode. Advisory fired 20+ Partners this year. McIlwain, Browning, Koehneman and crew are augering this firm into the ground, rate increase by rate increase.
Here’s a “fun fact”, after firing 200+ Advisory personnel last fall, more after the annual ARC review 2 months ago, the firm is now having a PEOPLE INITIATIVE! Seems that the few talented indidivuals who remain, seeing some small bit of hiring going on, are now bolting in droves. GO FIGURE!
And realizing that their semi-annual rate increases don’t exactly enthuse their clients, this week the firm held a marathon 4.5 hour webcast on “3 Client Principles” – a failed effort from years ago.
Here’s a clue – that survey you took about 15 months ago, the one that said PwC was the most arrogant firm of all the big 4, it still applies, and one of the “client principles” you should embrace is PAY FOR PERFORMANCE! Just because you charge $215 an hour, blended, doesn’t mean you’re worth it.
Failed leadership, no new ideas, just 3 musketeers managing SAP reports.
PwC doesn’t need to worry about D&T or Accenture, with their “single slot” credit system in SAP, they have -0- collaboration and expertise that they bring to their clients from across the country. Clients don’t get the best people – they get the local account Partner. Destined for demise!
No need for any IT staff, since they don’t have systems to support. They don’t have staff to send to clients. In NY, the Advisory Security practice has all quit, and SPA continues to lose people after already losing 35 people. It all started with the Juan and Duffy show. Two moron’s running a business with no practical business experience. You can’t take an associate, let them hang around a big4 firm for 15 years, make them partner, and then put them in charge. Time and time again we have seen PwC screw up simple business concepts because of this trend.
Good news, PwC is hiring! Or trying to hire. I’m not sure why anyone would join a big4 in this environment.
What’s the “last big thing” that PwC did (other than mine their clients for SOx $$$)? Built an IdM practice, about 10 years ago. Then after they spent 5 years telling clients and staff, “We’re not in the SAP / Oracle implementation business!” Yeah, they get back in the very mature business, trying to compete with D&T, Accenture, E&Y, not to mention Oracle Services, boutiques and KPMG.
Further, they are at least 3 years behind D&T and Accenture in terms of having a viable solution delivery option in India, notwithstanding the Bearing Point transaction. (LOTS of BearingPoint people were either fired or left in droves because the advisory “leadership” never really knew how to run a consultancy practice.)
This “outsourcing” is a way to reduce costs, increase partner share value, while hiding the obvious – declining performance and margins in the Advisory practice.
But as the spreadsheet jockey’s (and Carter Pate) used to say, “If we just raise rates $5 per hour, or increase utilization 1% across the board, it will bring tens of millions to the bottom line.”
Life doesn’t play out on a spreadsheet. Too many admin Partners (Browning, McIlwain, Koehneman, Deniszczuk) who don’t know what it’s like to compete in this market – not enough thought leadership, which is ostensibly what they are paid for.
Buh bye! Good luck with those People and Client initiatives!!!
Over the past year, IT Leadership tried to round up and get things running in a forward manner. Unfortunately, the business side has issues and does not comprehend what it takes to create and maintain their systems. Many thought IT was at their beck and call, which the Partners perpetrated at times. Arrogance doesn’t begin to describe some of those folks, but they do bring in the business that contributed to my/our paychecks. I dislike our jobs going away to the TCS people, (who are in Uruguay) but it is the latest trend with cutting costs. When the Partners no longer get what they want when they want it, then that attitude will change, but not until then. By that time, contractually, they are going to be so integrated with each other, it will be ridiculous!
On a positive note: PwC does have quality, educated people within their ranks – many other companies will be the beneficiaries when we show up at their door. We are professionals, with Bachelors or higher degrees and we actually care about the work we produce. We will all land on our feet and probably reduce our stress while we are at it!
@Shortimer
Thanks for your comment. I did not have the details on the Uruguay connection but I was aware Tata had operations in Latin America. It’s all cominig together now.
It is sad to see the last quality thing PwC had will soon be no more. USIT/GTS built a truly fully functional and forward thinking platform to conduct the multitudes of business on. IT just worked, having over 125,000 employees at client sites everyday, but still having full, functional, speedy access back to corporate systems was a feat USIT should be proud of.
I’d hire any of the “old USIT” guys anyday. I’ve seen so many companies’ IT shops run crappy, including some of the big names (cough tata….). It’s sad to see them go, but I bet the partners are “cleaning house” in order to bury all the skeletons that exist within email. I hope none of those emails end up on Wikileaks…. it could lead to an interesting regulatory session… I sure hope they are secure…Wait, with the US CISO, I doubt it.
Nice points,keep it coming…This is a fact people are leaving in droves,no doubt about it…
We find out tomorrow what the new smaller (300 or so positions) US IT organization looks like and we can start applying for those jobs on Tuesday. Everyone will know by end of month whether they have a job in the new org or if 12/31 is the last day.
Pretty much everyone’s feeling is that this will be a disaster. Everything that the firm has already tried with TCS, Infosys, PwCI has sucked and now TCS is going to take on the bulk of IT services for US and UK? Yeah right! Just talk to some of the people at Nielsen in this area that use TCS and find out how bad it is.
Time to go work on resume!
I agree with Ex_PwC’r, I too noted how these puppets (Browning, McIlwain, Koehneman, Deniszczuk) in Advisory leadership were too focused on connecting the dots on their spreadsheet data generated from HR. The last fews years were all about updating Retain and Opportunity Manager, which was a waste of time given how quickly things changed, especially when it became a dog eat dog environment and directors and managers kept most of the chargeable budget for themselves to keep their utilization up. HR also focused too much on the spreadsheets and forgot how to connect and talk with staff to really better manage their schedules. As they say, the tone begins from the top!
Needless to say, the firm lost focus of the concept that if they took care of their people everything else will fall in place. Hence, why so many have left or looking to bail once they find something better. The Advisory practice needs to better focus on what they can do well and execute, rather than trying to be like the other guys (Accenture, McKinsey). Advisory leadership keeps throwing money at acquisitions which aren’t panning out the way they would like and then the firm has to cut employees to recoup those losses.
Maybe it’s time for another leadership change!
It’s all about keeping the unit values up, isn’t it?
At least in a budgetary sense.
Whether you raise the topline through rate increases (after cutting client service staff), or cut below-the-line costs such as IFS, it’s clear that leadership keeps its job(s) because of promises made to the voting partners. The longer leadership shows action–no matter how ultimately ineffectual–to prop up partner units, the longer they get to keep their positions on the responsibiltiy matrix. And of course, responsibility equals income.
Threaten unit values, and you lose your position. It’s inevitable.
This is not just a PwC thing. Deloitte suffers from the same “perception trumps reality” disease. We saw that with the “50 billable hours/week” fantasy from last year. It wouldn’t surprise me if the others had the same problem.
It also wouldn’t suprise me if Dana, Randy, and Bob were really busy right now, trying to teach the horse to sing.
— Tenacious T.
As a “follow up” to Follow the Money – has anyone heard if any of the HR/admin positions are being affected in this layoff too….meaning those who create/generate spreadsheets, update Retain and OM? Would seem likely that they are in the line of fire very soon as well.
I’m not surprised at all that Tampa is taking a hit. The job market has sucked out loud here for the longest time, even years ago when the job market was supposedly better it still sucked in Tampa and it always will. Now it’s getting even worse. With a CPA license in Florida you can’t even make $40 grand if you can find work at all. What a disappointing career accounting has proven to be. Believe me you don’t know how bad I wish I had the money to pack my s hit and move outta this frickin’ state that always pays dirt no matter what you do.
bdo.com
At least the US have had the organisation chart, the UK were told 20th July and have been in limbo ever since we are expected to carry on as usual – but it is not usual as the majority of us have been told we could be for the chop and then there is NO MORE information. A terrible way to treat the very loyal, skilled and dedicated staff of the IT department
As a recent former employee, I would like to say it is a shame that a company like PwC would dismantle a high-performance technical staff of IT People for the perceived savings of a few dollars. If your company is hiring, you will find some of the best DBAs, UNIX Admins, SAN Admins, Network and Desktop people in the business. These people are used to working 50-60 hours per week for this ungrateful company. Meanwhile, there are no cuts in the several layer deep management staff. The people making the technology decisions are completely clueless and out of touch with the functions these people are performing. All they see is (1) our person costs $$$ and the person in India (fill in the blank) costs $$. What they refuse to admit is that the person who costs $$ has 2 years experience and their people have 20-30 and an indepth knowledge of their companies systems.
Good luck when TATA screws things up. Sadly, I will be laughing when it happens. A once proud PwCer who has moved on.
BTW – thank you for exposing PwC with this article. It is about 3 years overdue.
It appears to be a consistent theme that the people making the decisions are so far removed from reality of what is going on. I remember having my “talk” with a partner and I asked him if he was relying on India to replace the work we did and he acknowledged that was the plan. I asked him if he was aware of the ongoing issues even after 3 years of efforts to train them and he said does “partner x” know?…I responded that is why they are sending over a team to train them again. Needless to say, the group had such a bad experience and have decided to build a US team to do what India was supposed to do. Someone should be held accountable for all the time and money spent chasing this failed dream….but we know how things get swept under the carpet and they move on to the next hot topic.
Update on PWC offshoring to TCS.
The majority of employee’s who took positions at TaTa or TCS have now quit TCS for other oportunities. As of 12/1/2010, the turnover of IT operations to TCS has been a disaster and it is getting worse by the day. The SOCAT or South America or the Bearingpoint business that was purchased is doing poorly and Diamond has turned out to be a fake diamond. The management team stuck with this mess is having a terrible time keeping up and is falling further behind as more and more key people are leaving the firm. The interesting part is the senior leadership thought the IT positions could be easily transfered to India with few problems as these positions do not require much skill. Well it most certainly appears from the inside view they are correct and will pay the price during tax season. In fact, the offshoring by PWC could be a text book case on how not to offshore your entire IT department. Stay tuned, more to come!
I am exhausted and so disappointed with this firm. It has some of the smartest people I have ever met and the people are great. Somedays I wish they’d put the senior associates and managers in charge.
High performance culture but they pay average or just below average to the top talent. If you like this place but want to make more, leave and come back in 2 years. I guarantee you’ll see a HUGE upside.
Innovation yet the same people are in leadership positions with a record that shows they are anything but innovative. They keep recycling initiatives by wrapping it up in a different package when anyone who has been around for more than 4 years knows its been done and will fail again. But I guess why not try maybe the wind is blowing in a different direction this time? The worst is when they copy operating models of the firms we acquire or read about in some consulting magazine. Even if those firms failed, maybe it will work for us because we’re pwc …the advisory operations leader partner has perfected the art of recycling or borrowing. We need someone with imagination in that role. Lastly on this topic, some of these leaders haven’t had clients in 2-3 years and have the gaul to preach about the importance of selling. Frustrating.
Collaboration is a must for success…sure. Yet every metric and measure they have in place encourages anything but collaboration, it may even incentivize people to trample on each other as they begin the triathlon to partner. Poor sods, there is only room for 4 at the inn so which of you 100 will make it?
Coaching – your best shot of getting any real feedback is by putting a suggestion box and allowing people to drop anonymous notes so they can tell you what they’ve heard about you.
Leadership, some in advisory, frankly had their jobs too long. They should get clients so they have perspective…they should try to walk in the shoes of client service staff and partners who bust their tales everyday for the Firm. Dana is actually very smart, he needs to upgrade his team if he is going to be successful.
Great place to work stuff and diversity….a complete act. We are focusing on people, now we are not, we are again, no we are not, and we are again. This is the faster pendulum in this place and all driven by internal scores like a line of people waiting to resign or its that time of the year where surveys internal and external start. They especially care if we are at risk of falling off some major ranking magazine. If you’re a white male and talented with reasonable people skills you have a shot of being successful, if you’re a woman who plans of having a family…..good luck. If you’re a minority….you’ll need more than talent to be successful here, few survive.
So why am I still here….I love the people I work with. I am betting on the up and coming young partners, they’re smart and hope they survive and most important don’t conform to group think. If not that, then hoping for a different ending I guess.
PWC Update:
PWC has completed the transfer of it’s IT services to TCS or TaTa consulting services. From the front line view, all I can say is it is a disaster and is not getting better as senior leadership would like for you to believe. The following is part of an email from senior leadership pertaining to the help desk operations:
“Recently we switched from an internally supported IT help desk to one managed by a third-party vendor. The switch aligns with our global sourcing strategy and supports our changing business model. With a transition like this you typically encounter some challenges and — as expected — we have.
I want to acknowledge the concerns and frustrations that some of you are experiencing. We recognize how important it is to provide you with fast, high-quality service and that’s what you’ll get once we have worked through this transition. We’re already seeing improvements each day in response times and issue resolution – this will continue to get better over the next several weeks. Changes we have already put in place, like supplementing our help desk with US based contractors and increasing our staffing levels during peak times, are working. ”
The part where it states “We recognize how important it is to provide you with fast, high-quality service and that’s what you’ll get once we have worked through this transition.” is simply nothing more than spin by the senior leadership to make it look like things are improving when they are not. The number of major outages has gone through the roof and there are problems in all areas. Are things really improving? The answer is simply NO, as there are so many major failures it is hard to keep track of them. To say they are seeing improvements each day is just not true!
This sounds like a repeat of the failure in using PwC India to support the Data Assurance teams with C1 related work. Leadership never learns from prior mistake and just continues to copy what other big 4 firms are doing, even when it’s a failure. I remember telling R. Browning that PwC India was not ready to handle the work in 2009, but that’s not what leadership wanted to hear. A year later they have hired 20-30 US based personnel to supplement PwC India, and eventually will likely phase out India……. No one in leadership will be held accountable because they never want to hear bad news, and the bad decisions are repeated again – COPY & PASTE, repeat.