McKinsey plans to cut 2,000 jobs in one of its biggest layoffs

McKinsey & Co. plans to eliminate about 2,000 jobs, one of the biggest cuts the consulting giant has ever seen.

The firm known for rolling out staff-reduction plans for its clients is taking the ax to some of its own, with the move expected to focus on support staff who don’t have direct contact with customers , matter according to the wisdom of the people.

Under a plan called Project Magnolia, the management team is hoping the move will help preserve its compensation pool for its partners, the people said, asking not to discuss non-public information. The firm, which has seen its workforce grow rapidly during the past decade, is looking to restructure how it organizes its support teams to centralize certain roles.

The plan is expected to be finalized in the coming weeks, and the final number of roles to be eliminated from its 45,000 workforce could still change, one of the people said. The number is up from 28,000 just five years ago and over 17,000 in 2012.

“For the first time in more than a decade, we are redesigning the way our non-client-service teams operate, so that these teams work more effectively with our firm,” company representative DJ Carella said in an emailed statement. properly support and scale.” Carella said the firm is still hiring professionals who deal directly with customers.

The firm projects a record $15 billion in revenue in 2021 and surpasses that figure in 2022, one of the people said.

Companies in industries ranging from finance to technology to retailing are reducing staff amid declining demand and predictions of a recession. Amazon.com Inc. and Microsoft Corp. Tech giants including Goldman Sachs Group Inc., Morgan Stanley and other top banks are eliminating thousands of positions.

McKinsey’s move comes two years after Bob Sternfels took over as global managing partner after nearly 650 senior partners voted to oust his predecessor, Kevin Snyder. The management change was the culmination of a tumultuous period for the firm, which has faced criticism for its role in advising the makers of painkiller Oxycontin and several other business relationship investigations.

Snyder is now Goldman Sachs Group Inc. Helps drive Asia-Pacific operations.

McKinsey consultants helped popularize the phrase “the war for talent” in the late 1990s, a slogan that has come back into vogue in recent years because of the post-pandemic boom in hiring across industries. And the number of employees has increased. That growth is now beginning to see companies struggling to preserve profits cut jobs on a scale not seen in more than a decade.