McKinsey & Co. is joining KPMG, BDO USA, and Accenture in culling the consulting herd. Like Accenture, McKinsey doesn’t get much lip service on this website but it is worth talking about here because cuts from non-Big 4 consulting firms reflect the overall health of the consulting market which therefore affects the firms we do write about. The market may be heading toward suck is what we’re saying. McKinsey doesn’t technically lay people off as a rule so getting rid of about 1,400 people like this is kinda a big deal. According to a communication from global managing partner Bob Sternfels, it’s mostly support staff getting the boot.
The consulting giant, which has seen rapid growth in its headcount over the past decade, is restructuring how it organizes its support teams starting this week, including workforce reductions or moving people into other roles. The total cuts will amount to about 3% of headcount that has ballooned to almost 47,000 from 28,000 just five years ago and 17,000 in 2012.
The total number of cuts were described by a person with knowledge of the matter, who asked not to be identified because the information isn’t public. A spokesperson declined to comment.
“The painful result of this shift is that we will have to say goodbye to some of our firm functions colleagues, while helping others move into new roles that better align to our firm’s strategy and priorities,” Bob Sternfels, global managing partner, wrote in a note to staff. “Starting now, where local regulations allow, we will begin to notify colleagues who will depart our firm or be asked to change roles.”
The company, where it can, is “implementing reductions through attrition or voluntary departures,” Sternfels wrote.
In February, a source told Bloomberg News McKinsey was looking to get rid of about 2,000 people, with a focus on non-client facing support roles:
Under a plan dubbed Project Magnolia, the management team is hoping the move will help preserve the compensation pool for its partners, the people said, asking not to be identified discussing non-public information. The firm, which has seen rapid growth in its headcount during the past decade, is looking to restructure how it organizes its support teams to centralize some of the roles.
Consulting layoffs since February 2023:
- Accenture: 19,000 (note: like McKinsey, lots of admin people got flushed in this 2.5% reduction in headcount)
- BDO USA: 85 (we are hearing of more cuts coming down the pipe but nothing solid yet)
- KPMG: 700-ish (less than 2% of the workforce)
Global demand for consultants is still higher than it’s ever been so if you’re keeping your nose clean, keeping clients happy, and getting the work done from somewhere other than the back office you’re probably fine. Unless you work for BDO USA but…🐸 ☕️