By John Ikani
Global consulting firm McKinsey is set to undergo one of its largest rounds of staff cuts in history, potentially affecting up to 2,000 back-office employees.
While the exact number of job losses has yet to be determined, a company insider suggested it could range from several hundred to several thousand.
McKinsey had earlier on Tuesday confirmed that it was redesigning the way its non-client-serving teams operate, without providing further details.
According to the company insider, departments such as human resources, technology, and communications will be affected, while legal and compliance teams will not be hit by the restructuring.
The company has recently slowed down hiring of back-office staff, according to a second source, and other senior industry executives have stated that they expect many consultancies to make cuts to their back-office operations in order to control costs.
Despite the job cuts, McKinsey emphasised it will continue to hire client-serving professionals as demand for their services remains strong.
The company has added 17,000 staff over the last five years and now has a global workforce of 45,000, with just over half in client-facing roles.
It would be recalled that McKinsey, along with competitors Bain and BCG, raised its pay rates for new hires in 2021, resulting in one of the largest pay increases for new hires in over two decades.
McKinsey, which generated a record $15bn in revenue in 2021, reportedly surpassed this figure in 2022, although a precise number has not been released.
This news of job losses comes less than a week after accountancy group KPMG announced it would be reducing its workforce by 2% in the US, equating to roughly 700 people, due to a sharp slowdown in its consulting business.
KPMG had been struggling with the fall in merger and acquisition activity, which impacted its deal advisory business, as well as a decrease in demand for IT and strategic consulting.
