McKinsey & Company, the renowned consultancy, has reduced its global workforce by over 10% in the last 18 months, bringing the number of employees from more than 45,000 at the end of 2023 to around 40,000 today. This move comes as the firm responds to a decrease in demand and the repercussions of expensive legal settlements.
During the pandemic, New York-headquartered McKinsey expanded its workforce by almost two-thirds over five years, driven by a significant rise in demand for consultancy services. However, with the market now cooling, the company has found it necessary to make cuts. These reductions include the termination of 400 technical experts last year, particularly in data and software engineering, along with a wider restructuring starting in 2023 that led to 1,400 back-office employees leaving. The firm is also enhancing performance evaluations, encouraging underperforming consultants to depart voluntarily.
This headcount adjustment occurs as McKinsey contends with diminished growth in the consulting industry and substantial financial implications from its links with opioid manufacturers in the US, resulting in legal settlements amounting to hundreds of millions of dollars.
Despite these workforce reductions, McKinsey asserts its dedication to growth. A company spokesperson stated: “As clients look to us for guidance in thriving amid disruption, and with generative AI offering new productivity opportunities for our teams, our firm continues to grow and engage in more impactful work than ever before.” The spokesperson further mentioned that McKinsey still provides “unrivalled development opportunities” for employees and intends to recruit thousands of new consultants this year.
The company’s 2024 annual report, released this month, did not reveal updated figures for revenue or staff count; however, its 2023 revenue was reported as $16 billion. These developments reflect a phase of significant adjustment for the consultancy sector, which is experiencing a slowing of corporate expenditure and mounting scrutiny over business operations following years of rapid growth.
Read more: [McKinsey cuts 10% of global workforce amid slowdown in consulting demand](https://bmmagazine.co.uk/news/mckinsey-cuts-10-of-global-workforce-amid-slowdown-in-consulting-demand/)
