PwC cuts bonuses and slashes pay rises

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Top story: PwC Cuts Bonuses, Slashes Pay Rises; Tougher Times Ahead for UK Staff

PwC has announced a belt-tightening approach for its 26,000 UK employees, with reduced bonuses in some divisions, smaller salary hikes, and a shorter summer perk of half-day Fridays, now six weeks instead of eight. This move comes in response to "challenging market conditions" and aims to balance employee benefits with client commitments.

Ian Elliott, PwC's chief people officer, revealed that while the overall bonus pool is similar to last year, some divisions will see lower average bonuses and more modest pay increases. The pandemic-era half-day Fridays have been reduced, reflecting the firm's need to adapt to economic pressures.

Most UK employees received a 3% pay increase from July, down from up to 6% last year and 9% in 2022, in line with the broader trend of curbing pay rises as UK inflation drops to 2%. Law firms, however, continue to boost junior lawyer salaries significantly.

PwC has frozen entry-level pay bands for graduate consultants and increased the number of junior consultants marked as “off track” in performance reviews, barring them from raises and bonuses. Many are now on performance improvement plans (PIPs).

An associate criticized leadership's over-hiring and focus on chargeable hours, which has impacted morale, mental health, and promotion decisions. Despite these challenges, good performers can still advance to higher salary bands with automatic raises.

PwC's UK partners saw a dip in average pay to £906,000 in the year to June 2023, down from £1.03 million the previous year. The firm maintains its commitment to investing in its workforce, noting that most employees received a bonus and a 3% pay rise. Summer working hours will continue, though for a shorter period, and bonuses remain discretionary, withheld in cases of unmet performance expectations.

Read more here.

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