Partners at PwC UK experience a 5% average pay cut as total profits fall significantly, despite a rise in overall revenue amid rising costs and slower growth.
PwC UK Reports Decline in Partner Pay and Profits amid Slowdown in Revenue Growth
London, UK — Partners at PwC’s UK division have faced a reduction in their average pay this year while total profits have declined by a significant margin. Despite an overall increase in revenue, the accounting and professional services giant encountered rising costs and a slower growth rate that impacted its financial performance.
For the financial year ending June 2024, PwC’s UK and Middle East operations saw a 5% average cut in partner pay, bringing it down to £862,000. This decrease comes as a result of a challenging economic environment that decelerated revenue growth to 9%, a drop from the previous year’s impressive 16%. The firm has been pushed to navigate increasing staff costs, which surged by nearly 20% during the year.
PwC UK’s total revenue for the year amounted to £6.3 billion, a rise from £5.8 billion in the preceding financial year. Notably, the firm’s Middle East segment played a vital role in bolstering overall performance, posting a remarkable 26% surge in sales. However, growth within the UK lagged behind, reporting just a 3% increase.
“Our business has to mirror those of our clients—not just what they’re looking for now, but what they’ll need for the future,” noted Marco Amitrano, senior partner of PwC UK and Middle East. He elaborated on the firm’s objectives amidst the backdrop of a subdued market, highlighting investments in technology and skills development as critical priorities.
Indeed, PwC has dedicated substantial resources to technological advancements, spending over £100 million on platforms including artificial intelligence (AI). This move included a notable agreement with OpenAI in May, making PwC the largest user and first reseller of ChatGPT Enterprise. The firm also developed a personalised GenAI platform for its employees to facilitate more efficient operations.
Despite these efforts, PwC’s profits saw a decline. The firm’s total profits for the financial year fell to £1.1 billion, down from £1.3 billion the previous year and even further from £1.5 billion the year before that.
In terms of business divisions, PwC’s consulting arm was the standout performer, achieving an 18% increase in revenue, totalling £2.03 billion. The audit division followed with a 10% rise to £1.49 billion. Meanwhile, the tax segment experienced a more modest growth of 4%, and the deals business grew by 5%. Conversely, risk revenues slightly decreased by 1%.
Amitrano emphasised that the firm is preemptively adapting to future market demands. “Different businesses will have different levers for growth—ours include expanding in-person collaboration, new skills training, and more rapid adoption of technology,” he said.
He also remarked on the resilience and future potential of the professional services sector, believing it to be a key driver of the next growth phase in the UK’s economy. “By pulling these levers, we can better support other businesses, improve productivity, and help drive inclusive growth. The professional services sector is one of the UK’s real success stories and will continue to be a driving force in the next era of growth,” Amitrano added.
PwC’s results come ahead of similar disclosures expected from other Big Four firms, which are also likely to report tempered growth amidst the current challenging economic landscape.
Source: Noah Wire Services
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