McKinsey slashes 10 per cent of jobs in major overhaul
Consulting giant McKinsey has unleashed one of the largest job culls in the company’s history after ten per cent of staff faced the chop.
The New York-headquartered firm has reversed major expansion plans, which peaked during the pandemic, as it aims to drive profitability.
The consulting firm has reduced its workforce to 40,000 over the last 18 months, down from 45,000, according to sources cited by the Financial Times.
This comes amid a sharp downturn in revenue across the sector. Whilst its 2024 report, published earlier this month, did not include staff numbers or an annual revenue figure, McKinsey recorded $16bn in revenue for 2023.
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McKinsey had advised opioid makers like Purdue Pharma on aggressively boosting OxyContin sales, even amid rising overdose deaths. Their strategies were said to include targeting high-prescribing doctors and downplaying addiction risks.
Its workforce overhaul dates back to 2023, when the company shed 1,400 back-office staff. In 2024, McKinsey cut 400 specialists who worked in areas such as data and software engineering.
The consulting firm was also reported to be pressuring ‘weak-performing’ staff to quit after a critical mid-year performance review programme last year, the Financial Times reported.
Prior to 2023, McKinsey’s headcount had increased by almost two-thirds as it expanded its offerings beyond core advisory services. This included larger-scale project implementation and business, which boomed for consulting firms in the pandemic.
The widespread job cuts follow a dim outlook for the professional services industry. PwC became the latest of the ‘Big Four’ firms to dismiss employees after carving out plans to lay off 1,500 of its US workers.
Mid-level staff at McKinsey were reported to have been offered financial incentives to leave their posts last year, which included nine months’ pay while they looked for another job.
McKinsey said: “Our firm continues to grow and we’re doing more impactful work, in more ways, than ever. We continue to recruit robustly and will welcome thousands of new consultants to our firm this year.”