PricewaterhouseCoopers (PwC) is laying off staff across its China operations following a significant loss of corporate clients.
It has impacted the accounting firm’s revenue prospects in the region.
Sources said at least 100 employees from various teams in Beijing, Shanghai, and other locations are being let go.
In some instances, more than half of a single team has been affected.
The total number of layoffs is still unclear.
A PwC spokesperson said: “In light of changes to the external environment, we are making some adjustments to better optimize our organizational structure to align with market demand.”
The firm did not disclose the exact number of employees affected but emphasized that the adjustments were a difficult decision.
PwC assured that it is communicating with its staff and will comply with all relevant labor laws in China.
The layoffs come amid regulatory scrutiny and the departure of numerous Chinese corporate clients.
Potential regulatory penalties and client losses have unsettled PwC China staff, leading some to seek employment opportunities elsewhere.
Partners at other accounting firms have reported receiving numerous job inquiries from PwC employees.
PWC: “In light of changes to the external environment, we are making some adjustments to better optimize our organizational structure to align with market demand”
More than 30 publicly listed companies in mainland China have dropped PwC as their auditor this year.
Those include major state-owned enterprises like PetroChina, China Life Insurance, and Bank of China.
This shift followed scrutiny of PwC’s role in an alleged accounting fraud involving property developer China Evergrande Group.
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It reportedly inflated its revenue by $78 billion between 2019 and 2020.
The China Securities Regulatory Commission is investigating PwC’s involvement.
The agency may impose a record fine of at least 1 billion yuan ($138 million) and potentially suspend some of its onshore operations.
As of the end of last year, PwC’s onshore arm, PricewaterhouseCoopers Zhong Tian, had 291 partners and over 1,700 accountants in mainland China.
In 2022, the firm was the top earner among accounting firms in mainland China, with revenue of 7.9 billion yuan.
It audited approximately 400 Chinese firms listed in Shanghai, Shenzhen, Hong Kong, or New York.
Recently, PwC appointed Daniel Li, a Shanghai-based partner, as its new Asia-Pacific and China chair, marking the first time a leader from mainland China has held this position.
The firm also faces regulatory investigations in Hong Kong and Australia.
Its UK network was fined £5.6 million ($7.2 million) for auditing failures related to Babcock International Group.
