McKinsey likely to lay off nearly 2,000 employees in biggest job cuts round

Management consulting company McKinsey & Company is likely to let go of about 2,000 staffers in one of the firm’s biggest rounds of cuts ever, a report said on February 22. Under the job cuts plan called ‘Project Magnolia,’ the management team expects the decision to help in preserving the compensation pool for its partners, sources cited by Bloomberg said.

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

According to the Bloomberg report, McKinsey’s current workforce strength stands at 45,000 and the number of layoffs is yet to be finalised. The present headcount is up from 28,000 just five years ago and 17,000 in 2012.

The firm posted a record $15 billion in revenue in 2021, and surpassed that figure in 2022, it added.

The job cuts at McKinsey come at a time when layoffs at technology firms have begun spilling over to finance, retail and other sectors as well with employers reducing staff amid a slowdown in demand and predictions of a looming recession.

Tech giants including Amazon.com Inc. and Microsoft Corp. have announced plans for deep cuts, and Goldman Sachs Group Inc., Morgan Stanley and other top banks have been eliminating thousands of positions.

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. However, with that growth now starting to wane, companies are struggling to preserve profits and many are turning to job cuts at a scale not seen in more than a decade.