00:00Bloomberg has learned PwC executives have asked teams to resume pitching for work with Saudi Arabia's wealth fund as a one-year ban comes to an end.
00:09The ban temporarily prohibited the consulting firm from advisory and consulting services contracts with the Saudis PIF.
00:17Let's get more now with Bloomberg's Omar al-Shmouri.
00:21First of all, I can't believe it's been a year where this year has gone.
00:25What sort of an impact has this ban had on PwC?
00:28Good morning.
00:29So to put this in context, the PIF has been the entity anchoring Saudi Arabia's economic transformation drive.
00:37And that has resulted in a boom for consulting services across the region.
00:41So PwC, for instance, made about £2 billion in the fiscal year ending June 2024.
00:46That was a 26% increase from the year before.
00:49They were projecting similar results, but then the ban put a dent into these trajectories of growth.
00:56And it also came at the backdrop of a broader slowdown in Saudi that has affected the industry.
01:01So as a result, they've laid off about 1,500 members of their staff, including 60 partners.
01:07That was quite a blow.
01:08Wow.
01:08Okay.
01:08That is a substantial figure.
01:10So it's clearly had an impact on PwC.
01:12Do we have a better understanding of what exactly happened in order to understand how the issue was resolved?
01:20Right.
01:20So they haven't officially disclosed, both parties, the PIF and PwC.
01:25We know that PwC's global chairman, Mohamed Kande, flew to Riyadh for meetings with the PIF to resolve the issue.
01:31But nonetheless, they still had to complete the year.
01:35So as of last week, we learned that they've resumed pitching to the PAF.
01:41And they've been investing quite heavily in the kingdoms in terms of localization drives and talent training programs,
01:48as well as moving their regional headquarters to Riyadh, recently opening a very big office in the capital city.
01:53Okay.
01:53And what does it more broadly mean for the consulting sector as a whole?
01:57And as you say, there's the specific to PwC, and then there's the broader macro going on right now with consulting,
02:04where I believe activity has declined quite a lot.
02:07Right.
02:07So the ban was definitely a shock to the industry.
02:10I think it was a chance for them to review their practices.
02:14We know that some bids have become more competitive amid the slowdown, and there are broader layoffs.
02:20So I think they need to adapt to a changing environment, which is driven towards more implementation execution rather than just strategy consulting.
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