PwC Australia cuts 338 jobs as major bank ends 55-year audit relationship

By Lewis Jackson

SYDNEY (Reuters) -Pricewaterhouse Coopers (PwC) Australia on Wednesday announced hundreds of job cuts citing a slowing economy and the after-effects of a national scandal over leaked tax documents as a major audit client cut ties with the firm.

The audit and consulting major has been under fire this year after revelations a former partner leaked government tax plans and used them to win work with global companies looking to restructure their Australian tax affairs.

PwC Australia will make 338 staff redundant due to a slowing economy, and the firm’s smaller size since spinning off its government consulting practice at the height of the scandal, a spokesperson said in a statement.

Renamed Scyne Advisory, roughly 1,400 of PwC Australia’s more than 9,000 staff have moved over to the new advisory firm.

The redundancies are about 4% of the some 7,600 workers left at the firm. Those laid off included dozens of staff who had offers to move across to Scyne Advisory rescinded.

The move follows a similar round of layoffs at the British firm, which plans to cut around 600 jobs.

Since coming to light in January, the tax plan scandal has forced out PwC Australia’s chief executive and a string of senior partners, prompted public- and private-sector clients to freeze ties and entangled big-name customers including Alphabet (NASDAQ:)’s Google, Uber Technologies (NYSE:) and Facebook owner Meta Platforms (NASDAQ:).

WESTPAC ENDS 55 YEAR AUDIT RELATIONSHIP

Hours before the announcement, Westpac Group, Australia’s fourth-largest bank by market capitalisation, cut ties with the scandal-tainted auditor, ending a relationship stretching back to 1968.

Westpac, in a two-paragraph statement, did not mention the tax leak issue or give a reason for its decision to end its relationship with PwC. It said it would tender for a new external auditor as part of “best practice for audit firm rotation”.

PwC has audited Westpac since 2002, before which PwC partners and their ancestor firms had audited the bank since 1968.

Australia requires that auditors spend no more than five consecutive years out of seven on a company, though auditing firms can remain for longer periods by rotating staff involved.

However, PwC’s lead Westpac audit partner assumed the role less than two years ago, in December 2021, according to a Westpac governance statement this month.

A PwC Australia spokesperson said the firm understood the board’s decision and was proud of its time as Westpac’s auditor.

Westpac paid PwC about A$34 million ($22 million) in audit and audit-related fees in the 2023 financial year, roughly 1% of the local consultancy’s A$3.4 billion in revenue that year.

($1 = 1.5555 Australian dollars)