"For certain teams where utilisation is very low, the working week will be reduced by a further 20 per cent (e.g, working a three-day week for a full-time person) but we don't intend to drop anyone below the 60 per cent threshold."

The reduced working week will come into effect from April 13 and be in place until the end of June, staff were told.

"Employees can draw on annual leave, long service leave or [time off in lieu] balances to top-up income."

Aim is to protect jobs

PwC staff were told the moves, similar to those of mid-tier firm Grant Thornton, were designed to protect as many jobs as possible.

“We have made a commitment to our people to do everything we can to protect jobs and not make people redundant as a result of COVID-19," Mr Seymour said.

"We anticipate that the majority of our workforce will move to a four-day working week by May 1 at the latest.


"However, where our people are still required to work at 100 per cent, such as people who are delivering financial audits, they won’t be subject to the reduction in their working week. A small number of teams will move to a three-day working week."

Partners have also been told that from March the amount of money they can take out of the business has been cut by 20 per cent.

The firm has also asked partners and staff to use up their annual leave entitlements and indicated that it will "enhance" the way it manages contractors, an indication that a number will not have their terms renewed.

The firm, which hired 550 graduates in 2019, will also cut back its 2020 intake by about 50 per cent.

Work drying up

The big four firms have seen work dry up as companies across the economy announce sweeping cuts to spending and signal job reductions.

They have been hit hard as large companies, such as National Australia Bank, Virgin and Qantas slash their consulting spend. Spending on many types of advisory work is classed as a discretionary "third-party" cost at many corporates.

“We have seen significant changes in the mix of client work during the past few weeks," Mr Seymour said.


"Many clients have put projects on hold and we have seen a number of transactions stall given the volatility in domestic and global markets.

"However, clients are also seeking out services in a number of other areas, including protecting the welfare and wellbeing of their workforce, supply chain management, operational resilience and business continuity planning."

A unique issue that PwC will have to navigate is the drain on the profits of its ongoing partner retirement plan. Under this, eligible former partners are paid an average $140,000 a year – some for life – out of the continuing profits of the firm.

The closely-guarded retirement payment plan, revealed by The Australian Financial Review last February, costs the firm an estimated $88 million a year, based on the average payment multiplied by the approximate 625 former partners receiving the payment at the end of last June.

There is a mechanism to cut the payment if profits fall below a certain level but this has never been activated.

Big four cuts

Rival KPMG announced last week that it would cut 200 roles, slash the pay of equity partners by an annualised 17 per cent, and cut the earnings of salaried partners and staff earning more than $62,000 by an annualised 7 per cent.

Deloitte will shut down for a week in April, with the firm's partners and staff forced to take the time as annual leave, while EY (formerly Ernst & Young) has cut the amount of money partners can draw from the business, frozen recruitment and slashed discretionary spending.