Headline reference for the younguns.
The last time we checked in on PwC China they were looking at laying off as much as half of their 2,000-person financial services audit business, a direct consequence of the Evergrande situation that’s haunted the firm since the property developer and former audit client collapsed in 2021.
To make matters worse, shortly after the layoff news hit Financial Times reported that PwC China lost as much as two-thirds of its revenue — about $77 million USD — from mainland-listed clients, again directly related to Evergrande and the drama that followed its dramatic end. PwC gave Evergrande a clean audit opinion two years before its collapse all while the company was inflating revenue by $80 billion.
Along with clients leaving, the firm has been under the thumb of Chinese regulators who clearly do not mess around. China’s Ministry of Finance imposed 116 million yuan ($16.35 million) in fines and “confiscation of illegal gains” on PwC Zhong Tian (PwC China) while the China Securities Regulatory Commission handed out their own fine of 325 million yuan ($45.8 million).
Anyway, today we’re here to check in on PwC partners. According to Bloomberg — who got their info from people familiar with the matter — ten more Hong Kong partners are set to leave which brings the total exiting partners to 30 in the last six months. Things are just slightly more significant in mainland China where almost 80 partners have dipped out since December.
Said Bberg:
Some of the partners are being let go because of business reasons while others are leaving voluntarily for early retirement or to join other firms, the people said, asking not be discussing confidential matters.
The exits underscore that the firm is also feeling the pain in Hong Kong from its China woes. PwC Hong Kong and China are legally separate partnerships, but operate in collaboration and effectively share the profit and loss of the business together, the people said.
All of this comes at a time when PwC’s global business could really use the money. For the 12 months ending 30 June 2024, PwC firms around the world reported record gross revenues of $55.4 billion USD, up from $53.1 billion for FY23. While the Middle East helped a lot to pump those numbers up, China and Australia (let’s not forget they have their own drama down under) really brought things down. “Some difficult market conditions in Asia Pacific meant revenues were down overall by 5.6%,” said PwC in its 2024 revenue announcement. “Demand was particularly slow in China where revenues fell, and in Australia economic and business headwinds, as well as the divestment of the firm’s government consulting business, contributed to a decline in revenue over last year.”
In March the Saudi Arabia sovereign wealth fund Public Investment Fund (PIF) elected to black ball PwC from consulting contracts through February 2026. While no one has the full details, PwC said it was due to a client matter, not a regulatory one. They can still take on audit work during this time.
It’s not looking good, PwC bros.
