McKinsey plans thousands of job cuts as slowdown bites

Consulting industry seeing demand slump as clients turn cost-conscious

- SRIDHAR NATARAJAN & AMBEREEN CHOUDHURY

AS MCKINSEY & Co partners gathered in the consulting giant's birthplace in late October, Bob Sternfels delivered a rallying cry. "We will kick some ass as we start our second century," the firm's top executive told the thousands of attendees.

But away from the 100-year festivities in Chicago, McKinsey bosses have been conveying a more pragmatic message: It's time to get leaner.

The firm's leadership has discussed with managers in non-client-facing departments the need to cut about 10% of headcount across their business, according to people with knowledge of the matter. That could amount to a few thousand job cuts that McKinsey would stagger over the next 18 to 24 months, the people said, asking not to be identified.

For McKinsey, the go-to adviser for companies and countries, it's the type of cost-cutting approach that its consultants often prescribe to clients. The firm's revenue growth has flatlined in the last five years, leading to a reset after rapid hiring over the prior decade.

"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," a McKinsey spokesman said. "Just as we're partnering with clients to strengthen their organisations, we're on our own journey to improve the effectiveness and efficiency of our support functions."