McKinsey To Kickstart Layoffs This Week, 1,400 Jobs Cuts Likely: Bloomberg

Management consulting company Mckinsey plans to revamp its workforce starting week. The firm, which has seen an exponential rise in its workers in the past decade, may undertake significant job cuts. Bloomberg reported that it might involve major workforce reductions through layoffs and employee transfer into new positions.

The overall layoffs will amount to about three per cent of the workforce. However, the firm believes the action will help preserve its associates’ compensation pool. According to Bloomberg, the company’s workforce has increased to nearly 47,000 from 28,000 in the past five years. It was around 17,000 in 2012.

Global managing partner Bob Sternfels wrote that the company is “implementing reductions through attrition or voluntary departures where possible.” In a note to Mckinsey workers, Sternfel expressed sorrow over saying goodbye to some of the firm’s functional colleagues. He mentioned that to align with the firm’s priorities and business strategy, there will also be a change in the positions of employees. He said the names of the laid-off employees are not out yet, but that they will be informed soon.

Last month, some company officials aware of the layoff plan reported to Bloomberg that the firm is looking forward to cutting 2,000 jobs under what it calls Project Magnolia. Although the total number may still vary, most roles that will be facing layoffs do not have direct customer relations. From the company’s point of view, it’s a very strategic move because all front-office roles that significantly impact revenue will not be impacted.

According to the company reports, in 2021, the firm posted a record $15 billion in revenue, and in 2022 the company surpassed the same figure.

Last week, Accenture Plc announced that it would lay off 19,000 employees, i.e., approximately 2.5% of its workforce, over the next 18 months. It is reported to be a significantly huge layoff in the industry.

McKinsey is not the only company that is taking this move - other industry firms ranging from technology and financial services to commerce are laying off workers as demand starts to slow and a recession casts a shadow. For example, Amazon.com Inc., Microsoft Corp., Goldman Sachs Group Inc., Morgan Stanley, and other top banks are laying off thousands of employees.

McKinsey made the big move after two years when Sternfels decided to take over as a global managing partner. It was after his forerunner, Kevin Sneader, was ousted by a vote of the firm’s roughly 650 senior partners.