Global consulting company McKinsey has reduced its workforce by 10%, according to a report in the Financial Times.
The company expanded quickly during the pandemic due to an increase in demand for consulting services, but over the past 18 months has been looking to cut costs.
The workforce has been reduced from around 45,000 employees at the end of 2023, to 40,000.
In the five years to 2023, headcount had increased by two-thirds due to the boom in demand.
The cuts include 1,400 back-office staff, but a large number of underperforming consultants were put under pressure to leave the company during mid-year performance reviews in 2024, the paper reported.
According to Source Global Research, the UK consulting market saw revenues shrink during 2024, and this trend has been seen globally as other consulting firms report cost-cutting measures.
Earlier this month, Deloitte told employees it would promote fewer people, reduce average salary rises and cut bonuses in a bid to save costs.
McKinsey also faced a significant one-off cost in December 2024 of $650 million to settle criminal charges related to its role in consulting opioid firms such as Purdue Pharma in their branding.
A spokesperson for McKinsey said: “As clients turn to us to help them thrive amid disruption, and generative AI enables new levels of productivity for our teams, our firm continues to grow and we’re doing more impactful work, in more ways, than ever.
“We also provide unrivalled development opportunities for our colleagues, which is why we are widely recognised as one of the best places for talent to learn and develop into leaders. We continue to recruit robustly and will welcome thousands of new consultants to our firm this year.”
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
