McKinsey is reportedly considering significant job cuts of up to 2,000 in its back-office operations, in what could be one of the company's largest rounds of layoffs. The exact number of jobs that may be affected has not been finalized, but could range from several hundred to a few thousand. The restructuring is aimed at redesigning the way non-client-serving teams work to support and scale the company effectively. However, McKinsey has emphasized that it will continue to hire client-facing professionals as demand remains high. It has recently slowed down the hiring of back-office staff. Other industry executives also anticipate similar moves from other consulting firms to cut costs. The job reductions are expected to impact departments such as human resources, technology, and communications, but legal and compliance teams will remain unaffected. Bloomberg first reported the news of the job cuts.
McKinsey, along with its competitors Bain and BCG, announced one of the largest rounds of pay increases for new hires in more than 20 years last year, as the consulting industry faced rising demand and intense competition for talent. McKinsey recorded a record $15bn in revenue in 2021 and is expected to surpass that figure in 2022, according to a source familiar with the matter.
KPMG's Layoffs and McKinsey's Restructuring Reflect Tough Times for Consulting Firms
The news of potential job cuts at McKinsey follows KPMG's recent announcement that it will lay off nearly 2% of its staff, or roughly 700 people, in the US due to a significant slowdown in its consulting business. KPMG was the first of the Big Four accounting firms to publicly announce redundancies, and it had been struggling due to a decline in merger and acquisition activity that impacted its deal advisory business, as well as weakening demand for IT and strategic consulting.
