PwC US plans to shrink this year's consulting partner class by half

PwC US expects to promote less than half as many consultants to partner in the coming fiscal year as it did the prior year, people familiar with the matter told The Wall Street Journal (WSJ).

The Big Four accountancy plans to appoint approximately 85 US consulting partners on July 1, the sources said, down from 174 a year ago and 200+ two years ago.

The consulting business typically accounts for the majority of new partners, with the remainder in audit, certain tax work, and business services. The overall US partner class was 258 people last year and 283 two years ago.

PwC US is also reverting its organization to three business lines this summer. The firm in 2021 combined its tax reporting and accounting business into a single “trust solutions” line, while tax consulting joined the consulting business line. Tax will return to being a separate business in July.

The planned partner shrinkage arrives amid a continuing industrywide slowdown. Firms bulked up their ranks amid an unprecedented pandemic boom in demand, as corporate and government clients clamored for support in managing Covid-19-related challenges. In the last couple of years, however, higher interest rates and weaker economic conditions have lessened demand for certain services, such as transaction advisory.

The US consulting market is projected to grow by 6% in 2024, according to Source Global Research, down from double digit growth in the pandemic era.

Lower-than-expected attrition rates and slowing demand have led numerous consultancies to cut their headcount – including partners. Deloitte last year announced a 1.5% cut to its US workforce, KPMG US cut 5% of its employees, and EY US cut 5%.