Seven of PwC’s offices closed down in Germany last year, as the firm sought to save itself €25 million per year in costs. The move, which required staff to relocate to other regional offices, created acrimony among staff, and since, the Big Four has seen a number of its senior leaders move out, taking their client portfolio with them.
In October last year PwC in Germany announced it would close seven of its thirty locations in the country, savings its coffers €25 million per year. The affected locations are Dresden, Freiburg, Karlsruhe, Magdeburg, Mainz, Oldenburg and Siegen. The move has affected around 800 of the firm’s staff, none of whom were forced into redundancy. The professionals in the affected offices were ordered to move into close by offices, with relocation packages offered, where applicable, such as those needing to relocate from Karlsruhe to Stuttgart, an around two hour round trip.
The decision, and its subsequent implementation, resulted in a bitter falling out with a number of senior staff. Andreas Rupp, a Director at the firm and a sixteen year veteran, left the firm to join local rival Ebner Stolz. The defection saw not merely a loss of the clients serviced by Rupp, but also a number of team members that followed him out of the firm. PwC also lost a number of its legal division staff to its Big Four rival Deloitte, as well as to Bartsch & Partner. Losses were also recorded from the firm’s Tax and Assurance businesses.
In addition, other business advisory firms have been quick to move into the space left behind by the office closures. Ebner Stolz, founded in 2009, with revenues of around €160 million, recently strengthened its position in the country with the opening of three new offices – including one in Karlsruhe.
The loss in staff morale and, in some cases, the staff themselves, may have a detrimental effect on the firm as its competition with other Big Four players heats up. PwC’s revenues in Germany stand at €1.55 billion, putting it at number one among the Big Four, KPMG is close behind however with a fee income of €1.38 billion. EY and Deloitte are the fastest growers among the top four accounting and consulting giants – they last fiscal year saw their revenue increase by 8% to €1.37 billion and 9.5% to €729 million respectively.