PwC Australia cuts jobs after tax evasion scandal

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PwC Australia is cutting 329 roles and 37 partners are leaving the firm as part of the latest overhaul of its business following the damaging “tax leak” scandal.

The Big Four company, which employs about 7,000 people in the country, has been embroiled in a scandal for more than a year over sharing confidential information about legislation aimed at cracking down on tax avoidance. The company uses it to try to win new business and feed information into PwC's global network.

The scandal prompted a government investigation into the country's powerful consulting and auditing sector and triggered intense scrutiny of the public sector's relationships with firms including PwC, Ernst & Young and KPMG.

PwC Australia is one of the largest firms in the firm's international network, generating revenue of A$3 billion ($2 billion) in the financial year before the tax leak was made public. The company has since spun off its lucrative government consulting business to an independent firm and lost a number of contracts, including with Westpac, an audit client of two decades.

The latest round of job cuts – around 350 jobs were cut last year – will affect its consulting business, but PwC stressed that all business lines, including support functions, will be affected. As part of the latest reforms, 37 partners have agreed to accelerate retirement.

PwC employees were informed of the layoffs during a conference call Wednesday morning.

It is the latest move since PwC global network veteran Kevin Burrowes was parachuted in as chief executive of PwC Australia last year in a bid to restore his reputation.

“This has been a very challenging and complex process, but an important one as we restructure our business in line with our new long-term strategy,” he said on Wednesday.

PwC Australia plans to launch a series of roadshows over the coming months to unveil its new strategy, with promotions and new partner appointments set to take place in July.

This month, its partners voted in favor of appointing an independent governance committee chair as well as two independent board members, an unusual move for the usually insular consulting firm.

A new remuneration system has also been proposed that would see a portion of leadership team members' salaries withheld and no longer paid out if misconduct occurs.

PwC remains under political pressure to release a report into the use of tax leak data outside Australia and name six overseas partners who used the information.