PwC considers major staff cuts in China amid regulatory scrutiny

Global accounting firm PricewaterhouseCoopers (PwC) is reportedly considering significant staff reductions in its China operations, with up to half of its financial services auditing team potentially facing redundancy, according to sources familiar with the matter.

The move, first reported by Reuters, comes in the wake of regulatory investigations into PwC's role as auditor for the troubled property developer China Evergrande Group. Chinese authorities have been examining PwC's involvement in Evergrande's accounting practices after the securities regulator accused the developer of a $78 billion fraud over two years through 2020.

PwC's financial services auditing division in China, which employs at least 2,000 people across mainland China with main hubs in Beijing and Shanghai, could see the most substantial cuts. The firm is also considering laying off about 20 per cent of staff in other auditing teams and non-auditing business lines.

The regulatory scrutiny has led to an exodus of clients, particularly state-owned or state-backed enterprises and financial institutions. Over 30 listed Chinese firms, including China Life Insurance, China Cinda Asset Management Co Ltd, Bank of China, and PetroChina, have recently dropped PwC as their auditor.

In response to these challenges, PwC has implemented cost-cutting measures. The firm recently asked its 1,000-strong financial services auditing team in Shanghai to take career-break leave of about 15 days in July and August, during which staff can still receive a fifth of their income.

A PwC spokesperson stated, "In light of changes to the external environment, we are making some adjustments to better optimise our organisational structure to align with market demand."

PwC, which has 781 partners and nearly 19,000 employees in mainland China as of last September, may face severe consequences from the regulatory investigation. Reports suggest the firm could be hit with a record fine of at least 1 billion yuan ($138 million) and a suspension of operations for some of its mainland China offices due to failings in auditing Evergrande.

The firm's onshore arm, PricewaterhouseCoopers Zhong Tian LLP, reported revenues of 7.92 billion yuan ($1.1 billion) last year, making it China's top-earning auditor. However, with the current challenges and potential staff cuts, PwC's position in the Chinese market may be significantly impacted in the coming months.



Share Story:

Recent Stories


Data trust in the AI era: Building customer confidence through responsible banking
In the second episode of FStech’s three-part video podcast series sponsored by HCLTech, Sudip Lahiri, Executive Vice President & Head of Financial Services for Europe & UKI at HCLTech examines the critical relationship between data trust, transparency, and responsible AI implementation in financial services.

Banking's GenAI evolution: Beyond the hype, building the future
In the first episode of a three-part video podcast series sponsored by HCLTech, Sudip Lahiri, Executive Vice President & Head of Financial Services for Europe & UKI at HCLTech explores how financial institutions can navigate the transformative potential of Generative AI while building lasting foundations for innovation.

Beyond compliance: Building unshakeable operational resilience in financial services
In today's rapidly evolving financial landscape, operational resilience has become a critical focus for institutions worldwide. As regulatory requirements grow more complex and cyber threats, particularly ransomware, become increasingly sophisticated, financial services providers must adapt and strengthen their defences. The intersection of compliance, technology, and security presents both challenges and opportunities.

Unleashing generative AI: A force multiplier for financial crime teams
This FStech webinar, sponsored by NICE Actimize sees industry experts examine the revolutionary impact of generative AI on financial crime operations, and provides actionable insights to enhance your compliance strategies.