Global PwC chiefs must be grilled, Pocock says By Tom Ravlic
The Greens are calling for London-based PwC International Limited to answer questions before a powerful committee on how it runs PwC Australia by remote.
Senator Barbara Pocock told The Mandarinthe latest revelations in The Australian Financial Review about the global firm’s process of intervening in the Australian practice raises questions about how it is being run.
A report in the AFR said the global firm used clauses in its network agreement to take over governance of the firm when the tax policy confidentiality breach was revealed in January 2023
Deloitte restructure ‘year in the making’
Edmund TadrosProfessional services editor
Deloitte Australia chief executive Adam Powick says a global restructure a year in the making will strip out duplicated roles and make it easier to respond to client needs, as well as help the consulting firm respond to “challenging” economic conditions.
Deloitte CEO Adam Powick said the restructure would “address duplication in services which have arisen over time”. Louie Douvis
In what has been described as its biggest overhaul in a decade, Deloitte will shift from five to four operating units.
Two new units – strategy, risk & transactions and technology & transformation – will be created, and run alongside the existing audit & assurance and tax & legal units. Three existing units – consulting, risk advisory and financial advisory – will be mostly combined into the two new divisions.
“This restructure is the culmination of a substantive body of global work over the past 12 months,” Mr Powick said.
“The work has been guided by the principles of how we best organise our services to better align with priority client needs, simplify our offering model to make it easier to team and provide multidisciplinary solutions for our clients. It will also address duplication in services which have arisen over time.”
Challenging’ consulting market
Deloitte said the restructure was about enhancing the firm’s ability to deliver combined offerings to clients rather than cutting jobs. The tighter consulting market – revenue growth is expected to be in the single digits globally and flat in Australia – has caused the firm, and its peers, to trim staff numbers by tightening performance management and reducing recruitment.
Mr Powick said the local consulting market “remained challenging” and that the firm, which has a May year-end, would likely post a year of flat revenue growth after two years of double-digital percentage growth.
The local firm is also having to deal with cuts in public sector demand, triggered in part by the PwC tax leaks scandal, as well as the globally muted mergers and acquisitions market. In addition, demand from banking clients and retail clients has notably fallen as companies in those sectors trim costs by cutting back on advisory services.
The relatively more difficult local conditions have led to the early exit of dozens of staff and a higher-than-normal number of partner departures at Deloitte Australia.
The firm’s global chief executive, Joe Ucuzoglu, told Deloitte’s 15,000 global partners that the restructure would position the firm “for market leadership in the years ahead”.
Changes will ‘unlock growth’
“I committed to you that we would directly take on this topic as a key element of our global shared agenda, in a thoughtful and globally inclusive manner,” Mr Ucuzoglu wrote in an email sent overnight.
“We listened to the feedback from so many of you around the world about the complexity of the way we have historically organised our capabilities. We also looked holistically at outside-in views of clients, alliance partners, regulators, and industry analysts.”
He said the restructure would also help free up more “partners to be focused on the marketplace” and “unlock growth”.
Deloitte Australia and the firm’s Asia Pacific operations will put the restructure in place from June. Mr Ucuzoglu said this meant that FY2025 would be a “year of transition as we carefully co-ordinate changes, adapt systems, and collectively work towards the desired end state”.
Deloitte Australia to be No. 1
Deloitte Australia, which generated $2.85 billion in revenue last financial year, is still on track to become the largest local big four consulting firm thanks to the collapse in revenue at its once-dominant rival PwC Australia. The Australian operations employs about 14,000 staff and more than 1000 equity and non-equity partners.
Globally, the big four consulting firm generated $ US64.9 billion ($99 billion) in revenue in FY2023, up 14.9 per cent in local currencies, making it the largest of the big four.
Deloitte operates as network of partnerships around the world linked through a London-based company, Deloitte Global, that sets the overall strategy and polices the individual firms.
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Edmund Tadros leads our coverage of the professional services sector. He is based in our Sydney newsroom. Connect with Edmund on Twitter. Email Edmund at edmundtadros@afr.com.au
