PricewaterhouseCoopers (PwC) has asked its China-based partners to accept pay cuts of up to 50%, according to sources, amid a regulatory probe and client departures. The probe focuses on PwC’s auditing role for China Evergrande Group, accused of a $78-billion fraud by Chinese regulators.
Following the investigation, numerous clients have left PwC, leading to layoffs. Top-earning partners will see their income halved, while others face cuts of 20-40%. Pay reductions will take effect next month.
Senior China partners at PwC earn around 5 million yuan ($688,914) annually, mid-level partners 2-3 million yuan, and junior partners about 1.5 million yuan. Despite austerity measures in China’s financial sector, such steep cuts are rare for international firms.
PwC’s challenges stem from its work for Evergrande, ordered to liquidate in January after defaulting on debt repayments. PwC, which had audited Evergrande for nearly 14 years, has seen over 30 Chinese firms drop it as their auditor recently.