PwC job cuts target insolvency

PricewaterhouseCoopers is to shed up to 10% of its staff in somet. departments as a wave of post-merger rationalisation gets underway, Accountancy Age has learned.

Eighty people from the national business recovery services unit – 7% of its 1,100 staff – will leave the firm through voluntary redundancy and there are strong signals that others will follow when the Coopers & Lybrand and Price Waterhouse offices are combined this summer.

One internal source warned that the cuts would not be restricted to insolvency alone, and that this would not be the last of the jobs losses. He predicted deeper cuts than those acknowledged by PwC.

‘There will be a 25% reduction in employee numbers at PwC’s newly formed insolvency non-banking business, as part of a clearout of people from various lines, including tax and management consultancy.

Presumably, after insolvency, audit will be next.’

A spokeswoman for PwC acknowledged the unit was being scaled back. ‘As the business recovery side has been building up, so the insolvency side has suffered and the move to co-location might change things as people may not want to move to other areas,’ she said.

But she strongly denied suggestions that the staff changes were part of an attempt to revive Coopers’ old Cork Gully brand as a specialist corporate recovery practice.

Commentators were not surprised at the news, saying that it took at least six months after any merger before a company could realistically start to assess its requirements.

Insolvency specialists said it was right that that area was the first to be tackled in what could be a wider restructuring of the firm after last July’s merger. ‘The firm’s combined corporate recovery service is probably too big for the current market,’ said one.

‘It is building up the turnaround consulting area which tries to identify business difficulties early on. My guess is that they will probably move people sideways.’

A partner at a mid-tier firm said he had noticed more competition from PwC in search and selection. With other areas growing – PwC has been a high-profile recruiter of corporate finance specialists – it seems likely many staff will be offered posts in other parts of the firm rather than leave after the co-location programme.

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