This year, PwC’s UK partners received on average £862,000 (€1,030,097), which represents a decrease from the previous year due to sluggish sales growth in the leading accountancy firm along with an increase in operational costs impacting profitability. The firm, which also operates in the Middle East, saw its partners’ salaries slashed by 5% due to a deceleration in overall revenue growth to 9%, compared to the 16% boost in 2023, under tougher economic circumstances.
PwC’s Middle East segment helped to improve the company’s overall performance by recording a sales increment of 26%, contrasting with a meagre 3% increase noted in the UK. By June, PwC UK experienced a 14% reduction in total profits, sliding to £1.1 billion as employee expenses inflated almost by a fifth during this timeframe. The year’s total income amounted to £6.3 billion.
PwC is leading the Big Four accountancy firms (i.e., Deloitte, EY, and KPMG) in releasing the details of its UK financial results for the 2024 fiscal year. Amid a challenging economic landscape leading companies to economise, it is anticipated that its competitors will also report a growth deceleration.
Marco Amitrano, the senior partner for UK and Middle East divisions, stated that the firm had managed to expand in the strenuous UK market while simultaneously investing in technology and skills that would aid customer evolution and enhance the work efficiency of its staff. He added that fundamental services such as auditing and taxation showed resilience amidst the difficult business conditions.
The reduction in average profits that can be distributed among PwC’s partners in the UK and the Middle East, who are the owners and operators of the business, has marked the smallest payout for the company’s senior executives since 2020. Nevertheless, the highest-paid individuals received significantly higher remuneration.
The Big Four have had to deal with a slowdown in the market in the last year, following a surge in demand during and after the global pandemic.
In the past year, PwC, competing with other market players, has eliminated numerous jobs and issued a warning to employees during the summer regarding anticipated reduced salary increments and bonus allocations due to challenging economic climate, as was earlier reported by The Financial Times. Generating revenues of £2 billion, an increase of 18%, consulting was the most successful sector for PwC in this period, spurred by infrastructure projects throughout the Middle East. The firm also saw a revenue increase of 10% in its audit practice, whereas its tax sector experienced a 4% rise in sales. Despite a mild market for merger and acquisition activities, the firm’s dealing practice saw a 5% increase in earnings as clients sought proactive assistance. However, a minor decline in revenue was observed in its risk segment.
The company underwent leadership changes, with former consulting head Mr Amitrano taking over as the firm’s senior partner from Kevin Ellis in July, coinciding with leadership alterations at PwC’s global, American, and Chinese wings. This happened amidst a broader transition in the professional services industry, fuelled by the emergence of artificial intelligence technology. PwC declared a £100 million investment in technology, including AI, over the past fiscal year, in addition to other key investments. Amitrano had earlier revealed to The Financial Times that during his term, technology would be a crucial focus, asserting that AI presents multiple opportunities for the firm and its staff, despite potential apprehension. The Financial Times holds the copyright for this report.