Big Trouble for PwC: Job Cuts and Client Losses in China

PwC, a big accounting company, is having a hard time in China. They’re letting go of many workers because lots of their clients have stopped using their services. At least 100 people are losing their jobs in different cities like Beijing and Shanghai. In some teams, more than half the workers are being let go.

PwC says they’re making changes because of what’s happening in the business world. But they won’t say exactly how many people are losing their jobs.

Why Are Clients Leaving?

Over 30 big Chinese enterprises have severed their relationship with PwC this year. Some of these are very important companies for instance Petro China, China Life Insurance, and the Bank of China.

The main reason for this is that the big auditing company, PwC, is in a lot of trouble over something they pulled with a company called Evergrande. Some believe that PwC could have aided Evergrande to engage in cooking its books of the amount of cash the two firms were generating. Today, the government is investigating what exactly happened.

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PwC Could Be In For A Huge Penalty

It was also realized that the Chinese government may make PwC pay a very large fine which could be more than a hundred and $38 Million. It may also shut down some or all of its business for PwC in China for a temporary period.

Such layoffs have been witnessed in the Chinese PwC workers even before these recent job cuts. Some of them began to actively search for other jobs because they were afraid of what could eventually transpire for the firm.

Silent Layoffs: An Increasing Problem

Recently, people have been discussing such things as “silent layoffs” in organizations such as PwC and others. These are situations where the employer starves the employee of work, denies him or her the necessary working tools, and duty-post promotion among others to force him or her to resign. They might do this by:

1. Overloading of workers

2. Not providing a raise or bonus

3. People shall be relocated from jobs they have expressed dislike of

4. Displeasing all of one’s subordinates

This is a big worry for workers because it is unlike the traditional laid off and more so, it is difficult to combat than normal laid off. It also creates some level of stress and insecurity among the workers about their positions.

Implications of This for PwC

PwC topped other accounting companies in China in the year by raking in about $1.1 Billion. They organized their businesses with approximately 400 Chinese firms. However, with all these problems, PwC may lose the favorable stance that it has in the Chinese commercial environment.

It depicts how circumstances can alter in big firms in terms of financial performance within a short time when they are in the red with the government or are cut off by their clients.