Saudi Arabia's Public Investment Fund (PIF) has announced it will suspend all advisory and consulting services with PricewaterhouseCoopers (PwC) for the next two years, halting the firm's significant momentum within one of the world’s most lucrative markets. This ban, which extends until February 2026, has raised eyebrows across the consulting industry and beyond.
According to reports from Bloomberg, executives at the $925 billion PIF and its various subsidiaries have instructed staff to cease issuing new consulting projects to PwC. While auditing services provided by PwC remain unaffected, the reasons for the PIF's decision have not been disclosed, leaving many to speculate its motivations.
Despite having only launched its regional headquarters two years ago—where it employs over 2,000 professionals across key cities including Riyadh, Jeddah, AlUla, Al Khobar, and Dhahran—PwC has found itself entangled in the shifting dynamics of the Saudi market. The firm operates from more than 20 locations throughout the Middle East, where its non-audit services extend to mergers and acquisitions, capital markets, tax advisory, and extensive strategy consulting.
Try as it might, PwC's previous success within the region may be challenged as the PIF is a significant player, driving economic growth and transformation across Saudi Arabia. The fund has been instrumental to the Vision 2030 initiative, aimed at diversifying the kingdom’s economy beyond oil. This includes the establishment of more than 100 portfolio companies, many of which are at the forefront of innovative projects such as the $1.5 trillion Neom megacity and the transformation of historic locations like Diriyah and AlUla.
Marking extraordinary growth within the consulting sector, the Middle East contributed £1.97 billion (approximately $2.5 billion) to PwC UK’s revenues during the last financial year—a 26% jump from the previous year. Notably, the region remains the fastest-growing market for the company globally. Due to the PIF's investments, consulting businesses have gained significant traction; firms like McKinsey and Boston Consulting Group have also reported substantial earnings from operations within Saudi Arabia.
While industry rivals have echoed concerns over slowing global growth, PwC has pointed to the Middle East as its beacon of revenue growth, anticipating strong figures to continue through 2025 and 2026. This outlook, provided by the firm itself, will likely be tested as they navigate this ban.
The decision to halt consulting projects appears to be pivotal against the backdrop of various pressures facing the global consulting industry, with firms like PwC reporting declining demand for these services and revenue drops from regions as diverse as China and Australia. Meanwhile, Saudi Arabia’s consulting market boasts the largest size of approximately $3.2 billion, reflecting 18.2% growth from 2022.
It remains unclear if the PIF intends to review this ban before its expiration date. Questions linger about the long-term impacts on PwC's operations within Saudi Arabia, particularly when considering their recent establishment of significant offices and staff expansions.
With the PIF championing Saudi Arabia’s green energy shift and overseeing transformative projects, the absence of the most significant consulting player threatens to disrupt both the firm’s progress and, by extension, the progress of ambitious government-backed initiatives. While the future of this partnership between the PIF and PwC sits precariously, other firms may stand ready to seize the opportunity to fill any gaps left by PwC’s diminished role.
For now, consulting professionals and executives within the firm are left to ponder their next moves as they await clarity on the PIF's motives and strategic goals moving forward. The economic roadmap for Saudi Arabia relies heavily on consulting expertise, and as firms navigate these uncertainties, the industry will be watching closely.