PwC scandal: Redundant staff left 'shocked' and 'blindsided'

Even staff members who thought they had escaped the fallout from the tax leaks scandal were not safe from the firm’s sweeping job cuts. The junior staff member said he was promised a job at PwC spin-off firm Scyne Advisory but was unexpectedly sent back to PwC last month, only to be let go altogether on Wednesday.

PwC sold its public sector consulting arm to private equity group Allegro Funds for $1 in July after the federal Finance Department effectively cut the big four firm off from winning new work when the extent of the tax leaks scandal became public in May.

“Half of my team stayed with PwC and the other half were told they were going to Scyne. People weren’t given the opportunity to choose,” the staffer said.

The Scyne deal, which was finally signed off by the Foreign Investment Review Board this week, was finalised on Wednesday. Scyne will begin operating, with 100 former PwC partners and about 1300 former PwC staff, as an independent consulting firm from Monday.

Unfortunately, the PwC staffer was one of 78 staff members that Scyne unexpectedly sent back to PwC in late October because they were no longer required. Most of this group were made redundant on Wednesday, despite still being on a period of enforced gardening leave during which they had been encouraged to find other suitable roles within the firm.

The staff member said that before being told he was being sent back to PwC, there had been regular upbeat meetings with the Scyne management.

They had “stressed the importance of the deal and [said] that there would be no redundancies, and we would continue the work we were doing at PwC”.

“I was pretty optimistic. I was urged to stay,” he said. “I had options outside of the firm and my leaders talked me out of it.”

He now faces the prospect of searching for a new role in “a pretty dry market”.

“I think a lot of people will be forced to upskill in other areas ... I am going to reconsider my future in the professional services industry,” he said.

“If it was a matter of performance, that’s reasonable. But [if it’s] factors outside of your control, and that happened before I got here, [it] is a bitter pill to swallow. The actions of a few rogue characters have really tainted the brand. You kind of now have to whisper in someone’s ear that you work at PwC.”

Another staff member, a senior adviser, also says she was “blindsided” by the move to send her back to PwC after she had signed on with Scyne.

“I was shocked and the way it was handled was pretty poor,” she said. “All of the junior members of our team got told first. It was a small thing, but it added up to how it was all executed.”

She said the tax leaks scandal, which involved a former partner sharing confidential government information within the firm that was used to develop schemes to sidestep new tax laws, had only been worsened by the inept response of PwC’s leadership.

“I know they’re reading from a script [in the redundancy meeting], they say it is ‘due to changing strategic direction’. But it’s nothing to do with strategy. It’s an executive leadership failure,” she said.

This staffer was scathing about the future prospects of PwC: “It’s a sinking ship. They’re haemorrhaging in parts of the business and the entire sales pipelines has collapsed. I don’t think there’s an area of the PwC business that isn’t impacted by this.”

Despite her anger at the firm, she said might relax before Christmas and begin searching in earnest for a new role next year.

“It’s a weird time to be looking for a job [as] everyone is winding up for the year,” she says. “I’m having conversations and getting my face in front of people, but I realistically won’t look properly until next year.”

In an email to staff sent at 1:05pm on Wednesday, Burrowes outlined the breakdown of the 338 cuts: 75 of those cuts were the individuals “unable to move across to Scyne”, 122 were from across the firm, and the final 141 were from the firm’s Adelaide skilled service hub. Another six PwC staffers who declined to move to Scyne were being terminated and would not be eligible for statutory redundancy because they were offered like-for-like roles.

The closure of a hub is a particular blow to PwC. Before the scandal exploded in May, it had been growing quickly after carving out a niche in providing cybersecurity and cloud computing services to clients, particularly in the public sector.

Burrowes wrote that the firm had “made the difficult decision to unwind the [hub]” and had managed to find alternative roles for about 200 hub staff. Scyne has moved into a part of the building that had previously housed the hub.

A third former PwC staff member, part of a group of 47 that was cut in late June, is also scathing about the leadership but more optimistic about the prospects of anyone made redundant.

“I surprised at how quickly [the firm’s partners acted] to shore up their bottom line,” he says of this round of cuts. “That was the biggest thing. They [got rid] of high-performing teams and staff when they served no short-term purpose any more. There [was] no ability for people to try and rebuild their business.”

The mid-ranking staff member, who has since received multiple permanent offers, is still annoyed that the firm refused to pay FY23 bonuses when he was made redundant, despite him working that entire financial year.

“Anyone who was made redundant [in June], they refused to pay the FY22-23 bonuses,” he says. “We didn’t leave until this financial year, yet refused to pay [the] bonuses.”

But enough time has passed from the shock of losing his job for him to be confident that PwC alumni are still highly sought after despite the difficult job market.

“You feel very sorry for the people going home tonight, wondering how they’re going to pay the mortgage and feed the kids,” he said. “But at the end of the day, they’re all talented and they’ll find other jobs – and they’ll be thankful they’re not at PwC any more.”