As McKinsey marks 100 years, top management plans 10% workforce cuts

McKinsey & Co is planning to cut a few thousand jobs over the next two years, even as it marks its 100th anniversary, signalling a push to rein in costs after years of muted growth.

The consulting firm has discussed plans to reduce headcount by about 10 per cent in non-client-facing roles, according to people familiar with the matter, Bloomberg reported. The reductions are expected to be staggered over the next 18 to 24 months and could affect several thousand employees.

The move contrasts sharply with the celebratory tone struck at McKinsey’s centennial gathering in Chicago in late October, where global managing partner Bob Sternfels told partners the firm was ready to enter its second century with renewed momentum.

In a statement to Bloomberg, a McKinsey spokesperson said the firm was reviewing its support functions as part of a broader effort to improve efficiency. “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,” the spokesperson said, adding that McKinsey was on its own journey to strengthen effectiveness while continuing to serve clients.

The planned cuts come after a decade of rapid expansion. McKinsey’s global workforce grew from about 17,000 employees in 2012 to a peak of roughly 45,000 in 2022, before falling back to around 40,000. Over the past five years, firmwide revenue has hovered between $15 billion and $16 billion, reflecting a period of flat growth, according to Bloomberg.

People familiar with the discussions said McKinsey would continue to hire consultants while scaling back support roles, underscoring a shift in workforce mix rather than a broad retreat from client work. The firm previously cut around 1,400 roles in 2023 under an internal programme known as Project Magnolia.

McKinsey’s retrenchment mirrors a wider slowdown in the consulting industry as clients become more cost-conscious. Rivals including EY and PwC have also reduced headcount in recent years, while Accenture has warned of pressure from governments cutting spending on external advisers, Reuters reported separately.

Geopolitical and regulatory headwinds have added to the challenge. McKinsey has faced reduced work in China as authorities favour domestic firms, and lower fees in Saudi Arabia, which had been one of its largest markets, according to people cited by Bloomberg.

Despite these pressures, Sternfels has struck an optimistic note internally, telling partners that the firm was moving past recent setbacks and positioning itself for renewed growth. Whether the planned job cuts will be enough to reset McKinsey’s cost base — without denting morale — will be closely watched across the consulting industry.