As a significant audit customer severed their relationship with Pricewaterhouse Coopers (PwC) Australia on Wednesday, the company announced hundreds of job losses, citing a sluggish economy and the fallout from a national controversy involving stolen tax information.

This year, the major in audit and consulting has come under criticism following reports that a former partner revealed government tax plans and exploited them to get business with multinational corporations wishing to reorganize their tax affairs in Australia.

According to a statement from a spokeswoman, PwC Australia will lay off 338 employees due to the economy slowing down and the company’s reduced size after splitting off its government consulting division during the height of the controversy.

About 1,400 employees of PwC Australia, which was renamed Scyne Advising, have transferred to the new advising company.

About 4% of the 7,600 employees that remain at the company have been laid off. Numerous employees who had offers to transfer to Scyne Advisory withdrawn were among those laid off. This action comes after a similar round of layoffs at the British company, which intends to eliminate some 600 positions.

The tax plan controversy, which surfaced in January, has since forced the resignation of PwC Australia’s CEO and several senior partners, prompted clients in the public and private sectors to cut ties, and entangled prominent clients like Alphabet’s (GOOGL.O), Google, Uber Technologies (UBER.N), and Facebook owner Meta Platforms (META.O).

WESTPAC ENDS A 55-YEAR AUDIT RELATIONSHIP.

The scandal-tainted auditor and Westpac Group (WBC.AX), Australia’s fourth-largest bank by market capitalization, severed their links just hours before the revelation. The two had been friends since 1968.

In a two-paragraph statement, Westpac did not address the tax leak problem or explain its decision to sever ties with PwC. “Best practice for audit firm rotation” called for a new external auditor to be hired, and that’s what it indicated it would do.

Previously, PwC partners and their predecessor firms have audited Westpac since 1968. PwC has been auditing the bank since 2002.

Australia mandates that auditors work for a company for no more than five of the seven years they are employed there; however, auditing companies are allowed to stay longer by rotating the workforce.

However, a Westpac governance statement released this month states that PwC’s lead Westpac audit partner assumed the position less than two years ago, in December 2021. A representative for PwC Australia noted that the company respected its tenure as Westpac’s auditor and acknowledged the board’s decision.

In the 2023 financial year, Westpac paid PwC around A$34 million ($22 million) in audit and audit-related fees, or about 1% of the local consultancy’s A$3.4 billion in sales for that year.