McKinsey to eliminate nearly 2,000 jobs; likely to be finalised in coming weeks

McKinsey layoffs: Support staff in roles that don’t have direct contact with clients are likely to be the ones affected as part of the nearly 2,000 job cuts as McKinsey looks to restructure how it organises its support teams to centralise some of the roles, the report said.  

Global management consulting firm McKinsey & Co is planning to eliminate about 2,000 jobs, according to a Bloomberg report citing people with knowledge of the matter. The report said the move is expected to focus on support staff who do not have direct contact with clients of the company.

The management team is expecting the action would help protect the pay pool for its partners under a scheme known as "Project Magnolia," according to the report. The layoff plan is expected to be finalised in the coming weeks, and the final number of roles to be eliminated from its 45,000 workforce could still change, the report said.

For the first time in more than a decade, "we are rethinking the way our non-client-serving teams function, so that these teams may successfully support and expand alongside our firm," DJ Carella, a company spokesman, said in an email. Carella stated that the company is still seeking qualified individuals who work closely with clients. The firm posted a record $15 billion in revenue in 2021, and surpassed that figure in 2022.

A slowdown in demand and forecasts of an impending recession have led to personnel reductions at businesses in a variety of sectors, including retail, technology, and finance. Deep layoffs have been announced by tech behemoths like Amazon.com Inc. and Microsoft Corp., while hundreds of roles have been slashed at prominent banks like Goldman Sachs Group Inc. and Morgan Stanley.

It may also be noted that back in late 1990s, McKinsey consultants helped popularise “War for Talent”, a phrase that’s come back into vogue in recent years as the post-pandemic boom led to a frenzied period of hiring and headcount expansion across industries, especially in the IT sector.