McKinsey plans fresh round of job cuts as growth stalls
After years of rapid hiring, McKinsey’s revenue growth has largely plateaued. Firmwide revenue has hovered between $15 billion and $16 billion over the past five years, prompting a reset in how the firm manages costs.
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McKinsey & Co. is reportedly weighing a fresh round of cost-cutting measures, including a reduction in staff across non-client-facing functions, as the consulting giant grapples with slowing growth and a tougher operating environment.
McKinsey cuts 200 tech roles as AI replaces support jobs
According to a Bloomberg report, McKinsey’s leadership has spoken with managers in support departments about cutting roughly 10% of headcount in those teams. The reductions, which could translate into several thousand roles, are expected to be rolled out gradually over the next 18 to 24 months.
The conversations come even as McKinsey’s top leadership struck an upbeat tone at the firm’s annual partner gathering in Chicago in late October, which also marked the start of its centenary celebrations. Addressing partners, global managing partner Bob Sternfels reportedly said the firm was poised for renewed momentum as it entered its second century.
After years of rapid hiring, McKinsey’s revenue growth has largely plateaued. Firmwide revenue has hovered between $15 billion and $16 billion over the past five years, prompting what insiders describe as a reset in how the firm manages costs.
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In a statement, a McKinsey spokesperson reportedly said the firm was reviewing the effectiveness of its internal operations in light of technological and market shifts. “As our firm marks its 100th year, we’re operating in a moment shaped by rapid advances in AI that are transforming business and society,” the spokesperson said, adding that McKinsey is working to improve efficiency in its support functions while continuing to invest in client service.
It remains unclear what the net impact on overall headcount will be. McKinsey’s workforce expanded sharply over the past decade, rising from about 17,000 employees in 2012 to a peak of roughly 45,000 in 2022. Since then, employee numbers have declined to around 40,000.
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The potential job reductions underscore the challenges facing the global consulting industry, as clients rein in spending and scrutinise discretionary advisory work. Rivals including EY and PwC have also reduced staff in recent years, while McKinsey itself cut around 200 technology roles last month as automation and artificial intelligence begin to replace some functions.
