PwC’s Saudi Consulting Ban: How Will the Firm Recover?
In a surprising development, Saudi Arabia’s Public Investment Fund (PIF), one of the largest and most influential sovereign wealth funds in the world, has temporarily banned PwC from taking on advisory and consulting services contracts until February 2026. This decision has left many industry observers speculating about the possible reasons behind the move, though no official explanation has been provided.
The halt on PwC's consulting work does not affect its auditing services, allowing the firm to continue with its audit-related projects within the PIF and its over 100 subsidiaries. According to sources close to the matter, PIF has communicated the decision to its portfolio companies, instructing them to pause handing out new consulting projects to PwC until the ban is lifted.
PwC has been a key player in the region, especially after receiving a license two years ago to establish its regional headquarters in Saudi Arabia. The firm has made significant strides in the kingdom, with over 2,000 employees spread across major cities like Riyadh, Jeddah, AlUla, Al Khobar, and Dhahran. The Middle East has proven to be one of PwC’s fastest-growing regions, generating around US$2.5 billion in revenue for the company in the year ending June 30, 2024. This marked a 26 percent increase from the previous year.
For PwC, the ban represents a significant blow, especially considering the substantial role Saudi Arabia's Vision 2030 has played in driving the region’s consulting market. The PIF, with its ambitious portfolio of projects—such as the US$1.5 trillion megacity Neom and massive cultural initiatives like Diriyah and AlUla—has been a crucial source of business for consulting firms like PwC. These projects are core components of Saudi Arabia’s plan to diversify its economy away from oil by fostering growth in sectors like tourism, entertainment, and technology.
The Middle East remains a highly profitable market for consulting firms globally, with competitors like McKinsey & Co. and Boston Consulting Group also thriving in the region. While PwC has enjoyed strong revenue growth in the Middle East, this ban could temporarily stall its momentum in one of its most lucrative markets.
On the global front, PwC and its competitors have reported slower growth in 2024 due to a broader decline in consulting demand, particularly in regions like Australia and China. The Middle East, however, has remained a bright spot for PwC, making this pause on its Saudi operations particularly challenging.
As for what comes next, much will depend on how PwC navigates this disruption and whether it can maintain its foothold in the kingdom while awaiting the end of the ban. For now, the firm’s focus will likely shift to reinforcing its audit services in Saudi Arabia while preparing for a more cautious outlook in its regional consulting business.
