Around 2,000 employees are expected to be affected by one of the largest rounds of layoffs in the history of consulting powerhouse McKinsey & Co.
According to those familiar with the situation, the company that made its name by developing staff reduction plans for its clients is now laying off its own employees. Support staff who do not interact directly with clients are likely to be affected by the layoffs.
According to the people who requested anonymity because they were discussing private information, the management team hopes the move, codenamed “Project Magnolia,” will help preserve the compensation pool for its partners. Because of the company’s explosive workforce growth over the last decade, it is considering a new organisational structure for its support teams.
The final number of jobs to be cut from its 45,000-person workforce is still unknown, but the plan is expected to be finalised in the coming weeks, according to one of the people. This figure is a factor of five higher than the previous year’s total of 17,000, which was an increase from the previous low of 28,000.
For the first time in more than a decade, the company is overhauling its non-client-facing teams’ processes “so that these teams can effectively support and scale with our firm,” according to company representative DJ Carella in an email. Carella confirmed that the company is actively looking for client-facing employees.
According to one of the sources, the company established a new revenue record of $15 billion in 2021, which it then surpassed in 2022.
As a result of falling demand and fears of an economic downturn, businesses across the board, from finance to technology to retail, are laying off workers. Amazon.com and Microsoft have both announced massive layoffs, and top financial institutions such as Goldman Sachs Group Inc. and Morgan Stanley have laid off thousands of employees.
Two years ago, approximately 650 McKinsey senior partners voted to remove Bob Sternfels from his position as global managing partner. Following criticism for its role in advising the makers of the painkiller OxyContin and an investigation into other business ties, the company restructured its management.
Sneader now works for Goldman Sachs Group Inc., where she assists with regional operations management.
The phrase “War for Talent,” coined by McKinsey consultants in the late 1990s and revived in the aftermath of the post-pandemic hiring frenzy, first gained currency in the late 2000s. Companies are cutting payrolls at a rate not seen in over a decade as a result of the slowdown in growth.
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