McKinsey & Company has cut more than 10 per cent of its global workforce in the past 18 months, trimming headcount from over 45,000 at the end of 2023 to around 40,000 today, as the consulting giant adapts to a downturn in demand and the fallout from costly legal settlements.
The New York-based firm had dramatically scaled up during the pandemic, increasing its workforce by nearly two-thirds over five years in response to a surge in demand for consultancy services. But as the market has cooled, McKinsey has been forced to tighten its belt.
The reductions include the dismissal of 400 technical specialists last year in areas such as data and software engineering, and a broader restructuring that began in 2023, resulting in the departure of 1,400 back-office staff. The company has also intensified performance reviews, putting pressure on underperforming consultants to leave voluntarily.
The headcount changes come as the firm grapples with slowing growth across the consulting sector and the financial consequences of its involvement with opioid manufacturers in the US, which have led to hundreds of millions of dollars in legal settlements.
Despite the cuts, McKinsey says it remains committed to growth. A spokesperson for the firm said: “As clients turn to us to help them thrive amid disruption, and generative AI enables new levels of productivity for our teams, our firm continues to grow and we’re doing more impactful work, in more ways, than ever.”
The spokesperson added that McKinsey continues to offer “unrivaled development opportunities” for its staff and plans to hire thousands of new consultants this year.
While the company’s 2024 annual report, published this month, did not include an updated revenue figure or staff numbers, its 2023 revenue stood at $16 billion.
The latest figures underline a period of significant recalibration for the consultancy sector, which has faced a slowdown in corporate spending and increasing scrutiny over business practices after years of rapid expansion.
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McKinsey cuts 10% of global workforce amid slowdown in consulting demand