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…