The massive layoffs across tech companies have demonstrated the harsh reality that businesses face when readjusting from the COVID-19 hiring boom. The consulting space has been facing a similar reckoning as slowing business and inflated headcounts catch up with some of the industry majors.
Each of the “Big Four” consulting powerhouses—EY, KPMG, PwC and Deloitte announced layoffs in the U.K. last year, impacting hundreds of staffers, reflecting the cost-cutting efforts the firms are undertaking in response to cooling business.
Now, in response to the persisting slowdown, PwC U.K. is planning to extend graduate programs—instead of promoting those who are part of the program, as is typically the case—as there isn’t nearly enough work at the senior associate level, the Financial Times reported Monday.
Last week, PwC told close to 100 graduates that they won’t be promoted in July, but instead would remain part of the graduate program for an additional six months until next January, the outlet reported. The reason? Sluggish demand for consulting services and headcount pressures.
The program is designed for early-career professionals, and a promotion typically comes with a change in title and hike in pay. PwC’s move will impact graduates who joined the firm’s consulting division in fall 2022—specifically those part of the October and November intake that year. Those who joined a month earlier, in September, are eligible to be promoted this July.
A representative from PwC told Fortune via email that the firm is “balancing business demand with our desire to support and train our graduates. A short delay in promotion is clearly disappointing for those affected but allows us to support careers over the longer-term.”
The spokesperson also added that PwC has “recruited over 3,500 graduates and school leavers since September 2022—the delay applies to 90 graduates in our consulting practice.”
The decision to extend the graduate program and push back promotions is the latest retrenchment by the sprawling consulting industry, which has been retreating for several months now. Consulting was hit by the “Great Resignation” during the peak of the COVID-19 pandemic, but the tables have turned sharply as the firms now scramble to cope with rising costs and plummeting demand for its services.
Professional services such as consulting were among U.K.’s largest recruiters of new graduates in 2023, according to market research firm High Fliers. Now, the industry’s behemoths have frozen pay and cut jobs in response to the trends hurting consulting, which have resulted in employees holding on to their jobs—unlike a few years ago, when many were quitting in search for better pay and working conditions. This has also led to fewer job openings within consulting, Bloomberg reported in September.
PwC U.K.’s partners were paid £906,000 ($1.14 million) on average in the year to June, down from the previous year’s £1.03 million, while the group’s profits for the financial year were £1.3 billion. PwC noted in its annual report that its consulting practice had grown 30%, thanks to high demand from the Middle East’s oil and energy projects.