McKinsey & Company to lay off approximately 2,000 employees in one of the firm’s largest rounds of layoffs ever. The management team decided to help preserve the compensation pool for its partners under the ‘Project Magnolia’ job-cutting plan.
According to the report, support staff with no direct contact with clients will likely be affected as McKinsey looks to restructure how it organizes its support teams to centralize some roles.
According to reports, McKinsey’s current workforce strength is 45,000, and the number of layoffs has yet to be determined. The current headcount was up from 28,000 five years ago to 17,000 in 2012.
The company reported a record $15 billion in revenue in 2021 and is expected to surpass that figure in 2022. The job cuts at McKinsey come as layoffs at technology firms have begun to spread to finance, retail, and other sectors, with employers cutting down staff amid a slowdown in demand and predictions of a looming recession.
Companies like Amazon.com Inc. and Microsoft Corp. have announced significant layoffs, and Goldman Sachs Group Inc., Morgan Stanley, and other central banks have cut thousands of jobs.
It should also be noted that McKinsey consultants helped popularise the phrase “War for Talent” in the late 1990s, a term that has recently resurfaced as the post-pandemic boom has led to a frenzy of hiring and headcount expansion across industries, particularly in the IT sector.
However, as that growth begins to slow, businesses are struggling to maintain profits, and many resorts to cutting down job on a scale not seen in more than a decade.