McKinsey Plots Thousands of Job Cuts in Slowdown for Consulting Industry (bloomberg.com) 26
McKinsey, the consulting giant that has spent a century advising companies on how to cut costs and restructure operations, is now turning that advice inward as it plans to eliminate thousands of jobs across its non-client-facing departments over the next 18 to 24 months.
The firm's leadership has discussed a roughly 10% headcount reduction in support functions, according to Bloomberg. McKinsey's revenue has hovered around $15 billion to $16 billion for the past five years after a decade of rapid expansion that saw employee count climb from 17,000 in 2012 to 45,000 by 2022. The headcount has since slid to about 40,000.
The cuts come as consulting firms face cost-conscious clients, Trump administration pressure on government consulting spending, and reduced payments from Saudi Arabia, which had been paying McKinsey at least $500 million annually in the decade up to 2024. McKinsey cut about 1,400 jobs in 2023 under a plan internally labeled Project Magnolia, and axed 200 global tech positions last month. The firm still plans to hire consultants even as it shrinks support staff.
The firm's leadership has discussed a roughly 10% headcount reduction in support functions, according to Bloomberg. McKinsey's revenue has hovered around $15 billion to $16 billion for the past five years after a decade of rapid expansion that saw employee count climb from 17,000 in 2012 to 45,000 by 2022. The headcount has since slid to about 40,000.
The cuts come as consulting firms face cost-conscious clients, Trump administration pressure on government consulting spending, and reduced payments from Saudi Arabia, which had been paying McKinsey at least $500 million annually in the decade up to 2024. McKinsey cut about 1,400 jobs in 2023 under a plan internally labeled Project Magnolia, and axed 200 global tech positions last month. The firm still plans to hire consultants even as it shrinks support staff.
but surely as consultants (Score:2)
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Is that 60-days notice or just 60-days pay?
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Good (Score:5, Interesting)
I've always detested what this company does. It is basically in the business of destroying value for consumers. What they do is identify areas where companies leave money on the table which is really value that consumers see and turn it into extra profit for the company. Allstate Insurance was one example of a company which was "McKinsey'd". They went in and identified all of the areas where value could be extracted from the product, and then turned it into profit, this caused the product to become less attractive to the consumer. I had Allstate insurance in the 80's but had to switch to another insurance carrier when they removed the value from their product. You might say that they were the selling enshittifcation as a service "EAAS".
Re:Good (Score:4, Interesting)
The stock market forces this. All public companies are stacked this way. If you are leaving money on the table, then you are hurting the share holder. Damn the quality or company reputation. It is a source of attack if you care about customers. Watch any company go public and you will see the erosion in a decade.
The stock market alone forces companies to despise their customers.
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This means that the long term strategy would be to go under, because once you are no longer providing value, the consumers will look elsewhere. (That is unless you are operating a cartel)
Lack of long term term planning is the Achilles heel of "C" corporations. There is no mechanism to force them to consider long term objectives. You might say that this is against shareholder interests as well, but mist shareholders don't own the stock long enough for it to matter to them.
There is a different corporate struc
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You don't hear many complaints about Publix Supermarkets doing these things. It's publicly traded,
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That's really not true. There are many companies, such as Costco, that have tremendous stock returns and that also, by all accounts, treat their employees and customers very humanely and well.
MBAs = enshittification.
I encourage all kids and college students I speak with to start their own businesses. I've found more and more over the years that starting businesses (perhaps outside of food services) is just incredibly far from most people's minds. If you are a business owner you are going to have to put in a
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And, despite there being no logical justification, evidence, or even fairness in the allegation, I'm going to go ahead and blame them for the 1929 crash as they were founded in 1926 and survived it.
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Trivial to replace (Score:3)
These people are overwhelmingly trivial to replace, a few slides and some self important babble is what AI thrives in producing.
The only thing that AI will have a hard time emulating is the filthy corrupt behind the scenes deals and general corruption that the big4 have cultivated as their only real tangible output and product.
Re:Trivial to replace (Score:5, Insightful)
In my experience it seems that consultants are often only hired to justify things that managers can't justify. Once they hire a consultant and the consultant tells them they should do the thing they want to do, they can do it with no further justification and blame the consultants when it all goes wrong.
AI should be pretty good at that.
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Consultancy is a scam (*) (Score:2)
What does a consultant actually do?
Let's be fair, if the consultancy is compacting the timeline, removing stress, strain, and providing workflow optimization, clarity, and good direction, well, keeping costs reasonably in check, I'm all for that, if your teams or company does not have the required knowledge or specialization.
On the other hand, how often do we have to hear about massive cost overruns? Not 5% or 10% cost overruns, 100%, 200%, 1000%?
Racing to the bottom as a joke? (Score:2)
Needs funny, but the best I can do is that every company includes some part or person who is least profitable and it seems easy and a "sure fire" path to higher profitability to cut off that part or person.
What could possibly go wrong? Until you get down to the last person?
McKinsey (Score:3)
Non Paywalled Version of Article (Score:2)
In related news... (Score:3)
...there are news reports of a massive spike in tiny violin sales.
McKinsey clueless.Trust or replace your management (Score:1)
lets make that stock go down! (Score:2)
lets make that stock go down!
When you can get the same results from AI (Score:4, Insightful)
Why bother to hire a consultant, who will most likely be using AI anyway?
Thousands of consultants GONE ! (Score:1)
Oh no. ... Anyway ... (Score:2)
EOM