The accounting firm also reported job cuts following weak demand for its consultants’ advice and a clash with clients in Saudi Arabia.
Continued weak demand for its consultants’ advice and a bruising clash with its most important client in Saudi Arabia led to growth at PwC’s UK arm falling to a 16-year low last year.
The Big Four accounting and consulting giant blamed the “challenging macro backdrop” for its slow year, during which it made the “tough decision to reduce roles in some areas”.
PwC UK, which also comprises the Middle East and Channel Islands network firms, did not give exact figures for the number of roles it has axed, but its financial filings show that its headcount has dropped from 36,000 in June last year to 33,800 this summer.
In the 12 months to the end of June, PwC UK’s revenues rose 0.4 per cent to£6.35 billion from £6.33 billion in its previous financial year. That is a marked slowdown compared with the past few years, when annual revenue growth has averaged more than 12 per cent and is the weakest growth the group has recorded since 2009, during the depths of the global financial crisis.
However, the “considered cost management”, which included a £167 million reduction in its annual wage bill, helped to boost profitability and protect partners’ pay. Despite the lacklustre revenue growth, pre-tax profits climbed 13 per cent to £1.46 billion from £1.30 billion.
Partner pay edged up, with PwC’s 980 or so UK partners getting £865,000, up from £862,000 in 2024, although senior partners will have received far more.
PwC’s roots date back to 1849, when Samuel Lowell Price opened an accountancy practice in the City of London. PwC, as it is now, was created in 1998 when Price Waterhouse and Coopers & Lybrand merged. Along with Deloitte, EY and KPMG, it is one of the Big Four global accounting and consulting firms.
Consultants were busier than ever coming out of the pandemic as clients sought their help planning for the post-Covid world, whether that be installing new software systems or reconfiguring supply chains.
However, trade wars, real wars, general elections and high inflation have prompted clients to rein in their spending on advice. As a consequence, revenue in PwC UK’s consulting unit fell 3 per cent to £1.98 billion in the year to the end of June. “Tougher market conditions” also affected the risk division, where revenue slipped 3 per cent to £596 million.
Tax was the stand-out service line, with clients still needing help adjusting to “complex regulatory change”. PwC UK’s income from tax advice rose 6 per cent to £1.23 billion. The deals teams brought in revenue of £1.05 billion, a year-on-year increase of close to 4 per cent, while PwC UK’s audit revenue was broadly flat at £1.50 billion.
PwC reported revenue growth — albeit muted — in each of its regions, although there was a noticeable slowdown in the Middle East, where revenues rose only 0.4 per cent, compared with 26 per cent in 2024.
PwC got into trouble with Saudi Arabia’s Public Investment Fund this year for trying to poach the chief internal audit officer at Neom, the futuristic $500 billion development along the Red Sea coast that PwC had been advising on. The clash resulted in the PIF imposing a one-year ban on handing new advisory work to PwC.